UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2019~~2020

¨ ☐ TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 000-54817

DIGITAL LOCATIONS, INC.
(Exact name of registrant as specified in its charter)

Nevada

20-5451302

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

3700 State Street, Suite 350, Santa Barbara, California 93105

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (805) 456-7000

Securities registered ~~pursuant to~~under Section 12(b) of the Exchange Act: None.

~~Title of each class~~

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value per share

~~Trading Symbol(s)~~

~~Name of each exchange on which registered~~

~~N/A~~

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ☒No ¨o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x ☒No ¨o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨o	Accelerated filer	¨o
Non-accelerated filer	¨☒	Smaller reporting company	x☒
		Emerging growth company	¨o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ oNo x☒

Securities registered pursuant to Section 12(b) of the Act: None.

The number of shares of registrant’s common stock outstanding, as of ~~November 14, 2019~~August 13, 2020 was ~~179,964,618.~~106,348,954.

DIGITAL LOCATIONS, INC.

INDEX

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DIGITAL LOCATIONS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets

September 30,
2019

December 31,
2018

ASSETS

(Unaudited)

Current assets:

Cash

$ 1,483

$ 19,232

Prepaid expenses

11,231

2,000

Current assets from discontinued operations

-

44,251

Total current assets

12,714

65,483

Property and equipment, net

757

1,117

Operating lease right to use

10,469

-

Non-current assets from discontinued operations

-

126,993

Total assets

$ 23,940

$ 193,593

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable

$ 132,021

$ 113,436

Accrued expenses and other current liabilities

4,267

2,191

Accrued interest, notes payable

516,318

342,752

Operating lease liability

10,469

-

Derivative liabilities

6,832,291

10,363,105

Convertible note payable, in default

29,500

29,500

Convertible notes payable – related parties ($25,980 in default)

58,600

58,600

Convertible notes payable, net of discount of $337,520 and $341,206, respectively

2,256,129

1,836,964

Current liabilities from discontinued operations

-

120,535

Total current liabilities

9,839,595

12,867,083

Total liabilities

9,839,595

12,867,083

Stockholders’ deficit:

Preferred stock, $0.001 par value; 20,000,000 shares authorized:

Series B, 16,155 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

16

16

Series C, 36,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

-

36

Common stock, $0.001 par value; 2,000,000,000 shares authorized, 115,692,996 and 40,750,040 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

115,693

40,750

Additional paid-in capital

26,013,554

25,492,975

Accumulated deficit

(35,944,918 )

(38,207,267 )
Total stockholders’ deficit

(9,815,655 )

(12,673,490 )

Total liabilities and stockholders’ deficit

$ 23,940

$ 193,593

DIGITAL LOCATIONS, INC.
Condensed Balance Sheets

	June 30,			December 31,
	2020			2019
ASSETS	(Unaudited)
Current assets:
Cash	$	15,108		$	8,275
Prepaid expenses		-			2,808
Total current assets		15,108			11,083

Property and equipment, net		271			595
Operating lease right to use		1,975			7,708

Total assets	$	17,354		$	19,386

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	214,463		$	126,478
Accrued expenses and other current liabilities		20,207			3,332
Accrued interest, notes payable		704,229			581,610
Operating lease liability		1,975			7,708
Derivative liabilities		6,716,702			6,160,895
PPP loan payable		9,501			-
Convertible note payable, in default		29,500			29,500
Convertible notes payable – related parties ($25,980 in default)		58,600			58,600
Convertible notes payable ($29,196 in default at June 30, 2020), net of discount of $88,947 and $258,518, respectively		2,526,895			2,378,405
Total current liabilities		10,282,072			9,346,528

Total liabilities		10,282,072			9,346,528

Stockholders’ deficit:
Preferred stock, $0.001 par value; 20,000,000 shares authorized:
Series B, 15,055 and 16,155 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		15			16
Series D, 0 and 1,000 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		-			1
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 51,507,228 and 1,049,380 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		51,507			1,049
Additional paid-in capital		26,296,745			25,937,634
Accumulated deficit		(36,612,985	)		(35,265,842	)
Total stockholders’ deficit		(10,264,718	)		(9,327,142	)

Total liabilities and stockholders’ deficit	$	17,354		$	19,386

See notes to condensed ~~consolidated~~ financial statements

3
Table of Contents

~~DIGITAL LOCATIONS, INC. AND SUBSIDIARY~~

~~Condensed Consolidated Statements of Operations~~

~~(Unaudited)~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Revenues

$ -

$ -

$ -

$ -

Operating expenses:

General and administrative

91,153

98,055

287,580

475,446

Depreciation

(1 )

337

359

1,011

Bad debt expense

356,851

-

356,851

-

Total operating expenses

448,003

98,392

644,790

476,457

Loss from operations

(448,003 )

(98,392 )

(644,790 )

(476,457 )

Other income (expense):

Interest expense

(246,490 )

(237,595 )

(727,290 )

(749,696 )
Gain (loss) on change in derivative liabilities

300,750

(235,651 )

3,904,122

2,029,272

Total other income (expense)

54,260

(473,246 )

3,176,832

1,279,576

Income (loss) from continuing operations before income taxes

(393,743 )

(571,638 )

2,532,042

803,119

Provision for income taxes

-

-

-

-

Income (loss) from continuing operations, net of income taxes

(393,743 )

(571,638 )

2,532,042

803,119

Loss from discontinued operations, net of income taxes

(64,315 )

-

(269,693 )

-

Net income (loss)

$ (458,058 )

$ (571,638 )

$ 2,262,349

$ 803,119

Net income (loss) per common share:

Basic

$ (0.01 )

$ (0.01 )

$ 0.04

$ 0.02

Diluted

$ (0.01 )

$ (0.01 )

$ 0.00

$ 0.02

Weighted average number of shares outstanding:

Basic

90,951,343

38,776,436

61,204,791

38,776,436

Diluted

90,951,343

38,776,436

3,700,131,456

38,776,436

DIGITAL LOCATIONS, INC.

Condensed Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019

Revenues	$	-		$	-		$	-		$	-

Operating expenses:
General and administrative		79,292			84,408			172,586			196,428
Depreciation and amortization		270			284			324			360

Total operating expenses		79,562			94,692			172,910			196,788

Loss from operations		(79,562	)		(94,682	)		(172,910	)		(196,788	)

Other income (expense):
Interest expense		(155,481	)		(258,950	)		(347,645	)		(480,800	)
Gain (loss) on change in derivative liabilities		(736,625	)		378,026			(826,588	)		3,603,372

Total other income (expense)		(892,106	)		119,076			(1,174,233	)		3,122,572

Income (loss) from continuing operations before income taxes		(971,668	)		24,384			(1,347,143	)		2,925,784
Provision for income taxes		-			-			-			-

Income (loss) from continuing operations net of income taxes		(971,668	)		24,384			(1,347,143	)		2,925,784

Loss from discontinued operations, net of income taxes		-			(86,828	)		-			(205,377	)

Net income (loss)	$	(971,668	)	$	(62,444	)	$	(1,347,143	)	$	2,720,407

Weighted average number of shares outstanding:
Basic		17,641,667			225,668			11,378,418			204,820
Diluted		17,641,667			15,332,130			11,378,418			15,311,282

Net income (loss) from continuing operations per common share:
Basic	$	(0.06	)	$	0.11		$	(0.12	)	$	14.28
Diluted	$	(0.06	)	$	0.00		$	(0.12	)	$	0.19

Net income (loss) from discontinued operations per common share:
Basic	$	-		$	(0.38	)	$	-		$	(1.00	)
Diluted	$	-		$	(0.38	)	$	-		$	(1.00	)

Total net income (loss) per common share:
Basic	$	(0.06	)	$	(0.28	)	$	(0.12	)	$	13.28
Diluted	$	(0.06	)	$	(0.28	)	$	(0.12	)	$	0.18

See notes to condensed ~~consolidated~~ financial statements

4
Table of Contents

DIGITAL LOCATIONS, INC. ~~AND SUBSIDIARY~~

Condensed ~~Consolidated~~ Statement of Stockholders’ Deficit

~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 (Unaudited)

Series A
Preferred Stock

Series B
Preferred Stock

Series C
Preferred Stock

Common Stock

Additional
Paid-in

Accumulated

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Total

Balance, December 31, 2018

-

$ -

16,155

$ 16

36,000

$ 36

40,750,040

$ 40,750

$ 25,492,975

$ (38,207,267 )

$ (12,673,490 )

Issuance of common stock for conversion of notes payable and accrued interest payable

-

-

-

-

-

-

74,942,956

74,943

203,558

-

278,501

Return and cancellation of Series C preferred stock

-

-

-

-

(36,000 )

(36 )

-

-

36

-

-

Close out EllisLab Corp. equity accounts

-

-

-

-

-

-

-

-

316,985

-

316,985

Net income

-

-

-

-

-

-

-

-

-

2,262,349

2,262,349

Balance, September 30, 2019

-

$ -

16,155

$ 16

-

$ -

115,692,996

$ 115,693

$ 26,013,554

$ (35,944,918 )

$ (9,815,655 )

	Series B Preferred Stock						Series C Preferred Stock				Series D Preferred Stock						Common Stock				Additional Paid-in			Accumulated
	Shares			Amount			Shares		Amount		Shares			Amount			Shares		Amount		Capital			Deficit			Total

Balance, December 31, 2019		16,155		$	16			-	$	-		1,000		$	1			1,049,380	$	1,049	$	25,937,634		$	(35,265,842	)	$	(9,327,142	)

Issuance of common stock for conversion of notes payable and accrued interest payable		-			-			-		-		-			-			40,677,465		40,677		57,343			-			98,020
Issuance of common stock for conversion of Series B preferred stock		(1,100	)		(1	)		-		-		-			-			9,777,778		9,778		(9,777	)		-			-
Reverse split rounding of shares		-			-			-		-		-			-			2,605		3		(3	)		-			-
Redemption of Series D preferred stock		-			-			-		-		(1,000	)		(1	)		-		-		1			-			-
Settlement of derivative liabilities		-			-			-		-		-			-			-		-		311,547			-			311,547
Net loss		-			-			-		-		-			-			-		-		-			(1,347,143	)		(1,347,143	)

Balance, June 30, 2020		15,055		$	15			-	$	-		-		$	-			51,507,228	$	51,507	$	26,296,745		$	(36,612,985	)	$	(10,264,718	)

See notes to condensed ~~consolidated~~ financial statements

5
Table of Contents

DIGITAL LOCATIONS, INC. ~~AND SUBSIDIARY~~

Condensed ~~Consolidated~~ Statement of Stockholders’ Deficit

~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 (Unaudited)

Series A
Preferred Stock

Series B
Preferred Stock

Series C
Preferred Stock

Common Stock

Additional
Paid-in

Accumulated

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Total

Balance, December 31, 2017

1,000

$ 1

16,155

$ 16

-

$ -

38,776,436

$ 38,776

$ 20,537,950

$ (30,038,453 )

$ (9,461,710 )

Redeem Series A preferred shares

(1,000 )

(1 )

-

-

-

-

-

-

1

-

-

Net income

-

-

-

-

-

-

-

-

-

803,119

803,119

Balance, September 30, 2018

-

$ -

16,155

$ 16

-

$ -

38,776,436

$ 38,776

$ 20,537,951

$ (29,235,334 )

$ (8,658,591 )

	Series B Preferred Stock				Series C Preferred Stock				Series D Preferred Stock				Common Stock				Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total

Balance, December 31, 2018		16,155	$	16		36,000	$	36		-	$	-		181,111	$	181	$	25,533,544	$	(38,207,267	)	$	(12,673,490	)

Issuance of common stock for conversion of notes payable and accrued interest payable		-		-		-		-		-		-		145,365		145		76,294		-			76,439
Settlement of derivative liabilities		-		-		-		-		-		-		-		-		82,632		-			82,632
Net income		-		-		-		-		-		-		-		-		-		2,720,407			2,782,851

Balance, June 30, 2019		16,155	$	16		36,000	$	36		-	$	-		326,476	$	326	$	25,692,470	$	(35,486,860	)	$	(9,794,012	)

See notes to condensed ~~consolidated~~ financial statements

6
Table of Contents

DIGITAL LOCATIONS, INC

Condensed Statements of Cash Flows

(Unaudited)

DIGITAL LOCATIONS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Nine Months Ended
September 30,

2019

2018

Cash flows from operating activities:

Net income

$ 2,262,349

$ 803,119

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation

360

1,011

Amortization of debt discount to interest expense

544,686

614,144

Gain on change in derivative liabilities

(3,904,122 )

(2,029,272 )
Bad debt expense

356,851

-

Common stock issued for fees

250

-

Changes in operating assets and liabilities:

Increase in prepaid expenses

(9,231 )

(6,698 )
Increase (decrease) in:

Accounts payable

18,585

3,990

Accrued expenses

2,076

91

Accrued interest, notes payable

182,604

135,552

Net change in assets of discontinued operations

10,843

-

Net cash used in operating activities:

(534,749 )

(478,063 )

Cash flows from investing activities

-

-

Cash flows from financing activities:

Proceeds from convertible notes payable

517,000

480,500

Net cash provided by financing activities

517,000

480,500

Net increase (decrease) in cash

(17,749 )

2,437

Cash, beginning of period

19,232

23,461

Cash, end of period

$ 1,483

$ 25,898

Supplemental Disclosure:

Cash paid for income taxes

$ -

$ -

Cash paid for interest

$ -

$ -

					Six Months Ended June 30,
					2020			2019

Cash flows from operating activities:
Net income (loss)					$	(1,347,143	)	$	2,720,407
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization						324			361
Amortization of debt discount to interest expense						216,337			362,766
(Gain) loss on change in derivative liabilities						826,588			(3,603,372	)
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses						2,808			(17,653	)
Increase (decrease) in:
Accounts payable						87,985			24,534
Accrued expenses						19,125			2,076
Accrued interest, notes payable						131,308			118,034
Change in net assets of discontinued operations						-			16,378

Net cash used in operating activities						(62,668	)		(376,469	)

Cash flows from investing activities						-			-

Cash flows from financing activities:
Proceeds from convertible notes payable						60,000			392,000
Proceeds from PPP loan						9,501			-

Net cash provided by financing activities						69,501			392,000

Net increase in cash						6,833			15,531
Cash, beginning of period						8,275			19,232

Cash, end of period					$	15,108		$	34,763

Supplemental Disclosure:
Cash paid for income taxes					$	-		$	-
Cash paid for interest						-			1,876

Non-cash financing and investing activities:
Debt discount for derivative liabilities	$	517,000	$	480,500	$	40,766		$	392,000
Common shares issued in conversion of debt	$	278,501	$	-		98,020			76,439
Surrender and retirement of Series C preferred stock	$	36		-
Redemption of Series A preferred stock	$	-	$	1
Common shares issued in conversion of Series B preferred shares						1			-
Reverse split rounding of shares						3			-
Redemption of Series D preferred stock						1			-
Settlement of derivative liabilities						311,547			82,632
Increase in other assets and operating lease liability	$	18,352	$	-		-			18,352

See notes to condensed ~~consolidated~~ financial statements

7
Table of Contents

DIGITAL LOCATIONS, INC. ~~AND SUBSIDIARY~~

Notes to Condensed ~~Consolidated~~ Financial Statements

~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

(Unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

Digital Locations, Inc. (the “Company”) was incorporated in the State of Nevada on August 25, 2006 as Zingerang, Inc. On April 2, 2007, the Company changed its name to Carbon Sciences, Inc. and on November 14, 2017, the Company changed its name to Digital Locations, Inc.

On November 30, 2018, the Company entered into an Agreement and Plan of Merger ~~( the “Merger”~~(the “Merger Agreement”) pursuant to which EllisLab, Inc., an S Corporation owned 100% by Rick Ellis, ~~that builds software for web professionals and provides related support services,~~ merged with and into EllisLab Corp., a ~~newly-formed~~newly formed subsidiary of the ~~Company.~~Company (the “Merger”). EllisLab, Inc. builds software for web professionals and provides related support ~~services~~services.

On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with Rick Ellis to sell to Rick Ellis all of the issued and outstanding shares of EllisLab Corp. for ~~$10,000. In payment of~~$10,000 and the ~~purchase price, Rick Ellis tendered and assigned to the Company~~ 36,000 shares of the Company’s Series C preferred stock ~~owned~~acquired by ~~him,~~Rick Ellis in the Merger, which represents all of the issued and outstanding shares of the Series C preferred stock. In connection with the EllisLab Corp. Sale Agreement, the ~~Covenant Not~~covenant not to ~~Compete~~compete and the ~~Lockup~~lockup of ~~Stock Consideration~~stock consideration entered into in connection with the Merger were terminated and the parties’ obligations thereunder were released. Pursuant to the Ellis Lab Corp. Sale Agreement, the Company effectively divested itself of the Ellis Lab business and discontinued it.

Consequently, the revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of income taxes” in our condensed statements of operations for ~~all period presented.~~the three months and six months ended June 30, 2019. The EllisLab Corp. assets and liabilities have been retroactively reclassified as assets and liabilities of discontinued operations. See Note 3. All significant intercompany accounts and transactions have been eliminated.

In November 2019, the Company announced its plan to focus its resources on developing a portfolio of cell tower sites to help meet the expected demand of rapidly growing 5G networks. The Company’s goal is to become a “landlord” of tomorrow’s wireless communications assets.

Effective February 14, 2020, the Company effected a reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225) (the “Stock Split”) with the filing of a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada. The Company has given retroactive effect for the Stock Split in its financial statements and notes thereto for all periods presented.

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019.~~2020. For further information refer to the financial statements and notes thereto included in the ~~Company’s~~Company's Form 10-K for the year ended December 31, ~~2018 filed with the Securities and Exchange Commission on April 1,~~ 2019.

Table of Contents

Going Concern

The accompanying financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. As of ~~September~~June 30, ~~2019,~~2020, our current liabilities exceeded our current assets by ~~$9,826,881~~$10,266,964 and we had a total stockholders’ deficit of ~~$9,815,655.~~$10,264,718. In addition, subsequent to the ~~agreement to sell~~ EllisLab Corp. Sale Agreement which closed on September 30, 2019, the Company does not have any sources of revenues, and has reported negative cash flows from operations since inception. The Company currently does not have the cash resources to meet its operating commitments for the next twelve months and expects to have ongoing requirements for capital investment to implement its business plan. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.

8
~~Table of Contents~~

The ability of the Company to continue as a going concern is dependent upon, among other things, raising additional capital. The Company has obtained operating funds primarily from the issuance of convertible debt. Management believes this funding will continue and will provide the additional cash needed to meet the Company’s obligations as they become due. There can be no assurance, however, that the Company will be successful in accomplishing its objectives. Without such additional capital we may be required to cease operations. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of the Company are disclosed in Note 2 to the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April ~~1, 2019.~~14, 2020. The following summary of significant accounting policies of the Company is presented to assist in understanding the Company’s interim financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment and intangible assets, operating lease obligations, impairment of assets, the deferred tax valuation allowance, the fair value of stock options and derivative liabilities. Actual results could differ from those estimates.

Property and Equipment

The Company’s property and equipment is stated at cost, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:

Computer equipment		3-5 years
Office furniture and equipment		7 years

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Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

The Company assesses the recoverability of property and equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

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Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options and warrants as derivatives. Where the number of common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional options, warrants and convertible debt and equity are included in the value of the derivatives. We estimate the fair value of the derivatives using the Black-Scholes pricing model and a multinomial lattice model based on projections of various potential future outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of ~~September~~June 30, ~~2019,~~2020 and December 31, ~~2018, the Company believes~~2019, we believe the amounts reported for cash, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable and convertible notes payable approximate fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

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We measure certain financial instruments at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018:~~2019:

	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
September 30, 2019:
June 30, 2020:
Derivative liabilities	$	6,832,291	$	-	$	-	$	6,832,291	$	6,716,702	$	-	$	-	$	6,716,702

Total liabilities measured at fair value	$	6,832,291	$	-	$	-	$	6,832,291	$	6,716,702	$	-	$	-	$	6,716,702

December 31, 2018:
December 31, 2019:
Derivative liabilities	$	10,363,105	$	-	$	-	$	10,363,105	$	6,160,895	$	-	$	-	$	6,160,895

Total liabilities measured at fair value	$	10,363,105	$	-	$	-	$	10,363,105	$	6,160,895	$	-	$	-	$	6,160,895

During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, the Company had the following activity in its derivative liabilities account:

	Convertible Notes Payable			Series B Preferred Stock		Stock Options			Total			Convertible Notes Payable			Series B Preferred Stock			Stock Options			Total

Derivative liabilities at December 31, 2018	$	7,809,054		$	2,339,898	$	214,153		$	10,363,105
Derivative liabilities at December 31, 2019												$	3,606,194		$	2,535,359		$	19,342		$	6,160,895
Addition to liabilities for new debt/shares issued		517,000			-		-			517,000			40,766			-			-			40,766
Elimination of liabilities for debt conversions		(143,692	)		-		-			(143,692	)		(76,692	)		(234,855	)		-			(311,547	)
Change in fair value		(4,037,960	)		236,373		(102,535	)		(3,904,122	)		(283,487	)		1,117,010			(6,935	)		826,588

Derivative liabilities at September 30, 2019	$	4,144,402		$	2,576,271	$	111,618		$	6,832,291
Derivative liabilities at June 30, 2020												$	3,286,781		$	3,417,514		$	12,407		$	6,716,702

Revenue Recognition

On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition” (Topic 605). The Company had no operating revenues prior to the Merger. Effective December 1, 2018, the Company’s revenues, included in loss from discontinued operations, were derived primarily from the sale of monthly and annual tech support subscriptions and partnership fees, and from software applications that customers purchase via the Company’s online store. Sales were processed using a real-time payment processing company. Revenue from product sales is recorded net of processing costs.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

·
identification of the contract, or contracts, with a customer;

·
identification of the performance obligations in the contract;

·
determination of the transaction price;

·
allocation of the transaction price to the performance obligations in the contract; and

·
recognition of revenue when, or as, we satisfy a performance obligation.

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Amounts collected from customers for support subscriptions and partnership fees with a contract life of one month or greater are recorded as deferred revenue and recognized over the life of the contract.

Subsequent to the ~~agreement to sell~~ EllisLab Corp. Sale Agreement, which closed on September 30, 2019, the Company does not have any sources of revenues.

Income (Loss) per Share

Basic net income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted net income or loss per common share is computed by dividing net income or loss by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents then outstanding. Potential dilutive common share equivalents consist of shares issuable upon the exercise of outstanding stock options and warrants to acquire common stock, using the treasury stock method and the average market price per share during the period, and shares issuable upon exercise of convertible notes payable and convertible preferred stock.

Basic weighted average number common shares outstanding are reconciled to diluted weighted average number of common shares outstanding as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018		2020		2019		2020		2019

Basic weighted average number of shares		90,951,343		38,776,436		61,204,791		38,776,436		17,641,667		225,668		11,378,418		204,820
Dilutive effect of:
Stock options		-		-		-		-		-		-		-		-
Series B preferred stock		-		-		734,318,182		-		-		2,564,286		-		2,564,286
Series C preferred stock		-		-		-		-		-		3,200,000		-		3,200,000
Convertible notes payable		-		-		2,904,608,484		-		-		9,342,176		-		9,342,176

Diluted weighted average number of shares		90,951,343		38,776,436		3,700,131,457		38,776,436		17,641,667		15,332,130		11,378,418		15,311,282

Operating Lease

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter.

On January 1, 2019, we adopted Financial Accounting Standards Board (“FASB”) ASC 842, “Leases.” ASC 842 requires recognition of assets and liabilities for the rights and obligations created by leases and new disclosures about leases. We adopted ASC 842 using the optional modified retrospective transition method. Under this transition method, we did not recast the prior period financial statements presented.

The adoption of ASC 842 resulted in the measurement and recognition of an operating lease liability and corresponding right-of use asset (included in other assets) in the amount of $18,352 as of January 1, 2019. The operating lease liability was measured as the present value of assumed remaining lease payments using an estimated incremental borrowing rate. We amortize the right-of-use asset over the term of the lease.

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Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued by the FASB during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and through the date of filing of this report that the Company believes will have a material impact on its financial statements.

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Reclassifications

Certain amounts in the condensed financial statements for the ~~three months and nine months ended September 30, 2018~~prior year periods have been reclassified to conform to the presentation for the ~~three months and nine months ended September 30, 2019.~~current year periods.

NOTE 3 – MERGER AND SUBSEQUENT SALE

On November 30, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the EllisLab, Inc., Rick Ellis (“Ellis”), and EllisLab Corp., a newly formed Nevada corporation and wholly owned subsidiary of the Company, pursuant to which EllisLab, Inc. merged with and into EllisLab Corp. (the “Merger”). Pursuant to the terms of the Merger Agreement, Ellis received 36,000 shares of the Company’s newly designated Series C Convertible Preferred Stock, with a stated value of $100 per share, in exchange for the cancellation of all common shares of EllisLab, Inc. owned by Ellis, which shares represented 100% of the issued and outstanding capital stock of EllisLab, Inc. The separate legal existence of EllisLab, Inc. ceased, and EllisLab Corp. became the surviving company.

Pursuant to the Merger Agreement, Ellis agreed to a covenant not to compete for a period of 2 years following the effective date of the Merger (the “Non-Competition Period”). Ellis further agreed that during the Non-Competition Period, he will not directly or indirectly solicit or agree to service for his benefit or the benefit of any third-party, any of the Company’s, Digital Locations, or EllisLab Corp. customers.

Pursuant to the Merger Agreement, during the period beginning on the effective date and ending on the 24 month anniversary thereof, Ellis will not directly or indirectly, (i) offer, sell, offer to sell, contract to sell, hedge, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or sell, or otherwise transfer or dispose of, any portion of the Series C preferred shares, or any shares of the Company’s common stock underlying the preferred shares, beneficially owned, within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934.

~~Each of the parties to the Merger Agreement made customary representations and warranties in the Merger Agreement.~~

On November 30, 2018, in connection with and pursuant to the Merger Agreement, the Company entered into a Nonstatutory Stock Option Agreement (the “Option Agreement”) with Derek Jones (“Jones”), whereby the Company issued to Jones an option to purchase 100,000,000 shares of the Common stock of the Company, at an exercise price of $0.005 (the “Option”), in exchange for his surrender of an option to purchase 10% of the shares of outstanding common stock of EllisLab, Inc. The Option vested but may not be exercised for 2 years from the date of the Merger. The option contains a blocker that prevents Jones from exercising the Option if such exercise would result in beneficial ownership of more than 4.99% of the outstanding shares of the Company’s stock, without at least 61 days of prior notice. Under the Option, Jones is also subject to the Rule 144 restrictions of an affiliate.

The acquisition of EllisLab, Inc. in the Merger ~~was~~has been accounted for as a purchase, and the accounts of EllisLab Corp. ~~are~~were consolidated with those of the Company as of December 1, 2018. The Company engaged an independent valuation firm to estimate the value of the consideration paid by the Company in the Merger, consisting of the issuance of 36,000 shares of the Company’s $0.001 par value Series C Preferred Stock to Ellis, valued at $4,345,866, and 100,000,000 stock options to purchase common shares of the Company to Jones, valued at $599,998.

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~~Based on the report of the independent valuation firm, the total value of the consideration paid of $4,945,864 was allocated as follows:~~

Cash

$ 35,822

Accounts receivable

22,235

Property and equipment, net

4,271

Accounts payable

(74,680 )
Accrued expenses

(14,176 )
Deferred revenue

(27,037 )
Loans payable

(60,000 )
Net liabilities

(113,565 )
Intangible assets:

Intellectual property

37,000

Customer base

79,000

Tradename/marks

8,000

Non-compete agreements

1,000

Goodwill

4,934,429

Total

$ 4,945,864

~~At December 31, 2018, the Company reviewed the goodwill recorded in the Merger and determined that an impairment expense of $4,934,429 was required.~~

On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with ~~Rick~~ Ellis to sell to ~~Rick~~ Ellis all of the issued and outstanding shares of EllisLab Corp. for ~~$10,000. In payment of~~$10,000 and the ~~purchase price, Rick Ellis tendered and assigned to the Company~~ 36,000 shares of the Company’s Series C ~~preferred stock~~Convertible Preferred Stock owned by him, which represents all of the issued and outstanding shares of the Series C ~~preferred stock. In connection with~~Convertible Preferred Stock. Pursuant to the Ellis Lab Corp. Sale Agreement, the ~~Covenant Not to Compete~~Company effectively divested itself of the Ellis Lab business and discontinued it. Consequently, the ~~Lockup~~revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of ~~Stock Consideration entered into~~income taxes” in connection with the Merger were terminated and the parties’ obligations thereunder released. Also, on September 30, 2019, the Company and Jones entered into an Option Cancellation Agreement pursuant to which the Option was cancelled.

~~The Company recognized a bad debt expense of $356,851 in its~~our condensed statements of operations for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2019 as a result of~~2019. When presented, the ~~agreement to forgive the loans made by the Company to~~ EllisLab Corp. ~~for operating funds.~~

~~Assets~~assets and liabilities have been retroactively reclassified as assets and liabilities ~~from~~of discontinued operations ~~at December 31, 2018 consisted of the following:~~

ASSETS

Current assets from discontinued operations:

Cash

$ 37,182

Accounts receivable

3,434

Prepaid expenses

3,635

Total current assets from discontinued operations

$ 44,251

Non-current assets from discontinued operations:

Property and equipment, net

$ 4,076

Intangible assets, net

122,917

Total non-current assets from discontinued operations

$ 126,993

LIABILITIES

Current liabilities from discontinued operations:

Accounts payable

$ 77,876

Accrued expenses

16,941

Deferred revenue

25,178

Total current assets from discontinued operations

$ 120,535

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NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the ~~following at:~~following:

	September 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019

Computer equipment	$	12,303		$	12,303		$	12,303		$	12,303
Office furniture and equipment		1,459			1,459			1,459			1,459
Total		13,762			13,762			13,762			13,762
Less accumulated depreciation		(13,005	)		(12,645	)		(13,491	)		(13,167	)

Net	$	757		$	1,117		$	271		$	595

Depreciation expense was ~~$(1)~~$270 and ~~$337~~$284 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively and ~~$359~~$324 and ~~$1,011~~$360 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

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5. CONVERTIBLE NOTES PAYABLE

Convertible Promissory Note ~~– Accounts Payable~~ of $29,500 in Default

On March 14, 2013, we entered into an agreement to issue a 5% convertible promissory note in the principal amount of $29,500, which is convertible into shares of our common stock at a conversion price equal to the lesser of $1.50 per share or the closing price per share of common stock recorded on the trading day immediately preceding the date of conversion. The note, with a principal balance of $29,500 at ~~September~~June 30, 2020 and December 31, 2019, matured on March 14, 2015, and is currently in default.

Convertible Promissory Notes – Related Parties of $58,600

On December 31, 2012, we issued 5% convertible promissory notes to two employees in exchange for services rendered in the aggregate amount of $58,600. The notes are convertible into shares of our common stock at a conversion price equal to the lesser of $2.00 per share or the closing price per share of common stock recorded on the trading day immediately preceding the date of conversion. We recorded a total debt discount of $57,050 related to the conversion feature of the notes, which has been fully amortized to interest expense, along with a derivative liability at inception. One of the notes with a principal balance of $25,980 at ~~September~~June 30, ~~2019,~~2020, matured on December 31, 2014 and is currently in default. The maturity date of a second note with a principal balance of $32,620 at ~~September~~June 30, ~~2019~~2020 has been extended to December 31, ~~2019.~~2020.

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March 2016 Convertible Promissory Note – $1,000,000

On March 4, 2016, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $1,000,000 (the “March 2016 $1,000,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from March 4, 2016.

On March 14, 2016, we received proceeds of $27,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $27,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we issued the lender a total of ~~5,925,853~~26,337 shares of our common stock in consideration for the conversion of principal of ~~$11,935~~$4,000 and accrued interest of ~~$3,838,~~$1,589, resulting in a principal balance of ~~$7,735~~$1,445 at ~~September~~June 30, ~~2019.~~2020.

On March 17, 2016, we received proceeds of $33,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On April 11, 2016, we received proceeds of $90,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $90,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On May 20, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

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On June 22, 2016, we received proceeds of $50,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $50,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On July 6, 2016, we received proceeds of $87,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $87,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On August 8, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On September 13, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On October 17, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

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On November 8, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On December 6, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On January 10, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On February 13, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On March 9, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On April 12, 2017, we received proceeds of $95,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $95,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On May 8, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

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June 2017 Convertible Promissory Note – $500,000

On June 2, 2017, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the ~~“June~~"June 2017 $500,000 ~~CPN”~~CPN"). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from June 2, 2017.

On June 2, 2017, we received proceeds of $60,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On July 10, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On August 11, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

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On September 12, 2017, we received proceeds of $85,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $85,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On October 13, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On November 8, 2017, we received proceeds of $75,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $75,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

December 2017 Convertible Promissory Note – $500,000

On December 14, 2017, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the ~~“December~~"December 2017 $500,000 ~~CPN”~~CPN"). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from December 14, 2017.

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On December 14, 2017, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On January 11, 2018, we received proceeds of $70,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $70,000 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $2,110 and the~~The debt discount has been fully amortized to interest expense.

On February 7, 2018, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $6,247 and the~~The debt discount has been fully amortized to interest expense.

On March 8, 2018, we received proceeds of $55,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $10,096 and the~~The debt discount has been fully amortized to interest expense.

On March 14, 2018, we received proceeds of $6,500 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $6,500 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $1,300 and the~~The debt discount has been fully amortized to interest expense.

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On April 9, 2018, we received proceeds of $77,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $77,000 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $20,885 and the~~The debt discount has been fully amortized to interest expense.

On May 7, 2018, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $20,877 and the~~The debt discount has been fully amortized to interest expense.

On June 7, 2018, we received proceeds of $52,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $52,000 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $22,500, and the~~The debt discount has been fully amortized to interest expense.

On July 10, 2018, we received proceeds of $35,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $35,000 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $18,315, and the~~The debt discount has been fully amortized to interest expense.

On August 16, 2018, we received proceeds of $24,500 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $24,500 related to the conversion feature of the note, along with a derivative liability at inception. ~~During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $15,304, and the~~The debt discount has been fully amortized to interest expense.

August 2018 Convertible Promissory Note – $500,000

On August 17, 2018, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the ~~“August~~"August 2018 $500,000 CPN"). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.01; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note matures, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from August 17, 2018.

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On October 8, 2018, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On November 5, 2018, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On January 17, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $1,164 and the debt discount has been fully amortized to interest expense.

On February 25, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,836 and the debt discount has been fully amortized to interest expense.

On March 22, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $5,601 and the debt discount has been fully amortized to interest expense.

On March 26, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,525 and the debt discount has been fully amortized to interest expense.

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On April 11, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $4,180 and the debt discount has been fully amortized to interest expense.

On April 19, 2019, we received proceeds of $65,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $65,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $19,536 and the debt discount has been fully amortized to interest expense.

On June 28, 2019, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $14,754 and the debt discount has been fully amortized to interest expense.

On July 29, 2019, we received proceeds of $40,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $40,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $19,891, resulting in a remaining debt discount of $3,169 as of June 30, 2020.

On September 27, 2019, we received proceeds of $33,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $16,410, resulting in a remaining debt discount of $8,025 as of June 30, 2020.

On October 8, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $12,432, resulting in a remaining debt discount of $6,831 as of June 30, 2020.

October 2019 Convertible Promissory Note – $500,000

On October 31, 2019, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “October 2019 $500,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.01; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note matures, with respect to each advance, one year from the effective date of each advance.

On August 17, 2018, we received proceeds of $10,500 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $10,500 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $6,588, and the debt discount has been fully amortized to interest expense.

On September 13, 2018, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $21,041, and the debt discount has been fully amortized to interest expense.

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On October ~~8, 2018,~~31, 2019, we received proceeds of $25,000 pursuant to the ~~August 2018~~October 2019 $500,000 CPN.

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On October 31, 2019, we received proceeds of $25,000 pursuant to the October 2019 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$18,699,~~$12,432, resulting in a remaining debt discount of ~~$548~~$8,402 as of ~~September~~June 30, ~~2019.~~

On October 26, 2018, we received proceeds of $12,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $12,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $8,975, resulting in a remaining debt discount of $855 as of September 30, 2019.2020.

On November ~~5, 2018,~~12, 2019, we received proceeds of $25,000 pursuant to the ~~August 2018~~October 2019 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$18,699,~~$12,432, resulting in a remaining debt discount of ~~$2,465~~$9,221 as of ~~September~~June 30, ~~2019.~~

On November 28, 2018, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $19,863, resulting in a remaining debt discount of $7,425 as of September 30, 2019.

On November 30, 2018, we received proceeds of $10,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $10,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $7,480, resulting in a remaining debt discount of $1,671 as of September 30, 2019.2020.

On December 24, 2018, we received proceeds of $50,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $50,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $37,397, resulting in a remaining debt discount of $11,644 as of September 30, 2019.

~~On January 17,~~19, 2019, we received proceeds of $25,000 pursuant to the ~~August 2018~~October 2019 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$17,534,~~$12,432, resulting in a remaining debt discount of ~~$7,466~~$11,749 as of ~~September~~June 30, ~~2019.~~2020.

~~On February~~January 25, 2019 weConvertible Promissory Note – $38,000

Effective January 25, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $38,000, which matured on January 25, 2020. The Company received proceeds of ~~$25,000 pursuant~~$35,000 after an original issue discount of $1,500 and payment of $1,500 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the ~~August 2018 $500,000 CPN.~~note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of ~~$25,000~~$38,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$14,863, resulting in a remaining~~$1,415 and the debt discount has been fully amortized to interest expense. During the six months ended June 30, 2020, we issued the lender a total of ~~$10,137 as~~12,855,132 shares of ~~September 30, 2019.~~our common stock in consideration for the conversion of principal of $22,378, accrued interest of $3,800 and fees of $2,000, repaying the debt in full.

~~On March 22,~~May 23, 2019 ~~we received proceeds of $25,000 pursuant~~Convertible Promissory Note – $33,000

Effective May 23, 2019, the Company entered into an agreement to ~~the August 2018 $500,000 CPN. We recorded~~issue a ~~debt discount of $25,000 related to the conversion feature of the~~10% convertible note ~~along~~ with ~~a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense~~an institutional investor in the principal amount of ~~$13,115, resulting~~$33,000. The note matured on May 23, 2020 and was in ~~a remaining debt discount of $11,885 as of September~~default at June 30, ~~2019.~~

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On March 26, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $7,705, resulting in a remaining debt discount of $7,295 as of September 30, 2019.

On April 11, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $7,049, resulting in a remaining debt discount of $7,951 as of September 30, 2019.

On April 19, 2019, we received proceeds of $65,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $65,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $29,126, resulting in a remaining debt discount of $35,874 as of September 30, 2019.

~~On June 28, 2019, we~~2020. The Company received proceeds of $30,000 ~~pursuant to the August 2018 $500,000 CPN. We recorded a debt~~after an original issue discount of ~~$30,000 related~~$1,750 and payment of $1,250 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the ~~conversion feature~~note during the 180 days from the issuance of the note ~~along with a derivative liability~~ at ~~inception. During~~redemption premiums ranging from 25% to 45%. After the ~~nine months ended September 30, 2019, amortization~~expiration of ~~debt discount was recorded to interest expense in~~180 days after issuance, the ~~amount~~Company has no right of ~~$7,705, resulting in a remaining debt discount of $22,295 as of September 30, 2019.~~

On July 29, 2019, we received proceeds of $40,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $40,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $5,164, resulting in a remaining debt discount of $34,836 as of September 30, 2019.

~~On September 27, 2019, we received proceeds of $33,000 pursuant to the August 2018 $500,000 CPN.~~prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$246,~~$12,984 and the debt discount has been fully amortized to interest expense. During the six months ended June 30, 2020, we issued the lender a total of 2,350,000 shares of our common stock in consideration for the conversion of principal of $3,804 and fees of $250, resulting in a ~~remaining debt discount~~principal balance of ~~$32,754 as of September~~$29,196 at June 30, ~~2019.~~2020.

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~~November 23, 2018~~May 24, 2019 Convertible Promissory Note – $33,000

Effective ~~November 23, 2018,~~May 24, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note ~~matures November 23, 2019.~~matured on May 24, 2020. On January 16, 2020, the note was assigned to another institutional investor. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$29,564,~~$7,764 and the debt discount has been fully amortized to interest expense. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we issued the lender a total of ~~10,690,179~~6,720,530 shares of our common stock in consideration for the conversion of principal of ~~$33,000~~$19,600 and accrued interest of $1,650, ~~extinguishing~~repaying the ~~note~~debt in full.

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~~December 5, 2018~~June 27, 2019 Convertible Promissory Note – $33,000

Effective ~~December 5, 2018,~~June 27, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note ~~matures December 5, 2019.~~matured on June 27, 2020. On January 16, 2020, the note was assigned to another institutional investor. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$30,649,~~$16,139 and the debt discount has been fully amortized to interest expense. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we issued the lender a total of ~~17,120,170~~16,207,380 shares of our common stock in consideration for the conversion of principal of $33,000 and accrued interest of $1,650, ~~extinguishing~~repaying the ~~note~~debt in full.

~~January 25, 2019 Convertible Promissory Note – $38,000~~

Effective January 25, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $38,000. The note matures January 25, 2020. The Company received proceeds of $35,000 after an original issue discount of $1,500 and payment of $1,500 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $38,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $27,832, resulting in a remaining debt discount of $10,138 as of September 30, 2019. During the nine months ended September 30, 2019, we issued the lender a total of 3,800,000 shares of our common stock in consideration for the conversion of principal of $4,386 and fees of $250, resulting in a principal balance of $33,614 as of September 30, 2019.

~~February~~August 13, 2019 Convertible Promissory Note – ~~$38,000~~$33,000

Effective ~~February~~August 13, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $38,000. The note matures February 13, 2020. The Company received proceeds of $35,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $38,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $38,000, and the debt discount has been fully amortized to interest expense. During the nine months ended September 30, 2019, we issued the lender a total of 27,071,429 shares of our common stock in consideration for the conversion of principal of $38,000 and accrued interest of $1,900, extinguishing the note in full.

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~~March 25, 2019 Convertible Promissory Note – $35,000~~

Effective March 25, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $35,000. The note matures March 25, 2020. The Company received proceeds of $32,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $35,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $20,589, resulting in a remaining debt discount of $14,411 as of September 30, 2019. During the nine months ended September 30, 2019, we issued the lender a total of 4,000,000 shares of our common stock in consideration for the conversion of principal of $5,200, resulting in a principal balance of $29,800 as of September 30, 2019.

~~May 23, 2019 Convertible Promissory Note – $33,000~~

~~Effective May 23,~~ 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures ~~May 23,~~on August 13, 2020. The Company received proceeds of $30,000 after an original issue discount of $1,750 and payment of $1,250 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on,On January 16, 2020, the note ~~into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior~~was assigned to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $11,721, resulting in a remaining debt discount of $21,279 as of September 30, 2019.

~~May 24, 2019 Convertible Promissory Note – $33,000~~

~~Effective May 24, 2019, the Company entered into an agreement to issue a 10% convertible note with an~~another institutional ~~investor in the principal amount of $33,000. The note matures May 24, 2020.~~investor. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019, amortization~~2020, we issued the lender a total of ~~debt discount was recorded to interest expense~~2,047,619 shares of our common stock in consideration for the ~~amount~~conversion of ~~$11,631,~~principal of $4,300, resulting in a ~~remaining debt discount~~principal balance of ~~$21,369 as of September~~$28,700 at June 30, ~~2019.~~2020.

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~~June 27, 2019 Convertible Promissory Note – $33,000~~

Effective June 27, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures June 27, 2020. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $4,328, resulting in a remaining debt discount of $28,672 as of September 30, 2019.

~~August 13, 2019 Convertible Promissory Note – $33,000~~

Effective August 13, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures August 13, 2020. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the nine months ended September 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $8,566, resulting in a remaining debt discount of $24,434 as of September 30, 2019.

August 29, 2019 Convertible Promissory Note – ~~$33,000~~$25,000

Effective August 29, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $25,000. The note matures on August 29, 2020. The Company received proceeds of $22,000 after an original issue discount of $1,500 and payment of $1,500 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, amortization of debt discount was recorded to interest expense in the amount of ~~$2,885,~~$16,410, resulting in a remaining debt discount of ~~$22,115~~$2,590 as of ~~September~~June 30, ~~2019.~~2020. The note had a principal balance of $25,000 as of June 30, 2020.

March 16, 2020 Convertible Promissory Note – $38,000

Effective March 16, 2020, the Company entered into a 12% convertible note with an institutional investor in the principal amount of $38,000. The note matures March 16, 2021. The Company received net proceeds of $35,000 after payment of $3,000 in legal fees and fees to the lender. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 45% discount from the lowest trading price during the 20 trading days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at a redemption premium of 150%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $18,766 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $5,450, resulting in a remaining debt discount of $13,316 as of June 30, 2020. The note had a principal balance of $38,000 as of June 30, 2020.

June 22, 2020 Convertible Promissory Note – $28,000

Effective June 22, 2020, the Company entered into a 12% convertible note with an institutional investor in the principal amount of $28,000. The note matures June 22, 2021. The Company received net proceeds of $25,000 after payment of $3,000 in legal fees and fees to the lender. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 45% discount from the lowest trading price during the 20 trading days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at a redemption premium of 150%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $28,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2020, amortization of debt discount was recorded to interest expense in the amount of $614, resulting in a remaining debt discount of $27,386 as of June 30, 2020. The note had a principal balance of $28,000 as of June 30, 2020.

Total accrued interest payable on notes payable was ~~$516,318~~$704,229 and ~~$342,752~~$581,610 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

6. PPP LOAN PAYABLE

A loan to the Company in the principal amount of $9,501 was approved under the terms and conditions of the Paycheck Protection Program of the United States Small Business Administration (“SBA”) and the CARES Act (2020) (H.R. 748) (15 U.S.C. 636 et seq.) ( the “Act” ) and was funded in May 2020. The loan may be forgiven pursuant to the provisions of the Act.

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7. CAPITAL STOCK

At ~~September~~June 30, ~~2019,~~2020, the Company’s authorized stock consisted of 2,000,000,000 shares of common stock, with a par value of $0.001 per share. The Company is also authorized to issue 20,000,000 shares of preferred stock, with a par value of $0.001 per share. The rights, preferences and privileges of the holders of the preferred stock will be determined by the Board of Directors prior to issuance of such shares.

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Series B Preferred Stock

On March 2, 2016, the Company filed a Certificate of Designation for its Series B Preferred Stock (the “Series B Certificate”) with the Secretary of State of Nevada designating 30,000 shares of its authorized preferred stock as Series B Preferred Stock. The shares of Series B Preferred Stock have a par value of $0.001 per share.

The total face value of this entire series is three million dollars ($3,000,000). Each share of Series B Preferred Stock has a stated face value of One Hundred Dollars ($100) (“Share Value”) and is convertible into shares of fully paid and non-assessable shares of common stock of the Company.

As of ~~September 30, 2019,~~March 31, 2020 and December 31, ~~2018,~~2019, the Company had 15,055 and 16,155 shares of Series B Preferred Stock outstanding, respectively, with a face value of ~~$1,615,500.~~$1,505,500 and $1,615,500, respectively. These shares were issued in March 2016 for the redemption and cancellation of $1,615,362 of convertible promissory notes and $264,530 of accrued interest payable. Effective February 26, 2020, William Beifuss, Jr., the Company’s President, converted 1,100 shares of Series B preferred stock into 9,777,778 shares of the Company’s common stock. Mr. Beifuss previously acquired the Series B shares from a lender in a private transaction.

The holders of outstanding shares of the Series B Preferred Stock (the ~~“Series~~"Series B ~~Holders”~~Holders") are entitled to receive dividends pari passu with the holders of Common Stock, except upon a liquidation, dissolution and winding up of the Company, in which case the Series B Preferred Stock has a preference. Such dividends will be paid equally to all outstanding shares of Series B Preferred Stock and Common Stock, on an as-if-converted basis with respect to the Series B Preferred Stock. The Series B Holders may elect to use the most favorable conversion price for the purpose of determining the as-if-converted number of shares.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Series B Holder shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders upon such liquidation, whether such assets are capital or surplus of any nature, an amount equal to one hundred dollars ($100) for each such share of the Series B Preferred Stock (as adjusted for any combinations, consolidations, stock distributions, stock splits or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment is made or any assets distributed to the holders of the Common Stock. After such payment, the remaining assets of the Company will be distributed to the holders of Common Stock.

If the assets to be distributed to the Series B Holders are insufficient to permit the receipt by such Holders of the full preferential amounts, then all of such assets will be distributed among such Holders ratably in accordance with the number of such shares then held by each such Holder.

The sale of all or substantially all of the ~~Company’s~~Company's assets, any consolidation or merger of the Company with or into any other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than fifty percent (50%) of the ~~Company’s~~Company's voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the ~~Company’s~~Company's voting power is transferred, excluding any consolidation or merger effected exclusively to change the domicile of the Company, is deemed to be a liquidation, dissolution or winding up.

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The Series B Preferred Stock is convertible into Common Stock.

The Series B Holder has the right, at any time, at its election, to convert all or part of the Share Value into shares of Common Stock. The conversion price is the lesser of (1) Fifty Percent (50%) of the lowest trade price of Common Stock recorded on any trade day after December 12, 2012 or (2) the lowest effective price per share granted to any person or entity, including the Series B Holder but excluding officers and directors of the Company, to acquire Common Stock, or adjusted, whether by operation of purchase price adjustment, settlement agreements, exchange agreements, reset provision, floating conversion or otherwise, any outstanding warrant, option or other right to acquire Common Stock or outstanding Common Stock equivalents (the ~~“Conversion Price”~~"Conversion Price").

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The conversion formula is as follows: The number of shares receivable upon conversion equals the Share Value divided by the Conversion Price. A conversion notice (the ~~“Conversion Notice”~~"Conversion Notice") may be delivered to Company by any method of the Series B ~~Holder’s~~Holder's choice (including but not limited to email, facsimile, mail, overnight courier, or personal delivery), and all conversions will be cashless and not require further payment from the Holder. If no objection is delivered from the Company to the Series B Holder, with respect to any variable or calculation reflected in the Conversion Notice, within 24 hours of delivery of the Conversion Notice, the Company will thereafter be deemed to have irrevocably confirmed and ratified such notice of conversion and waived any objection. The Company will deliver the shares of Common Stock from any conversion to the Series B Holder (in any name directed by the Series B Holder) within three (3) business days of Conversion Notice delivery. If the Company is participating in the Depository Trust Company ~~(“DTC”~~("DTC") Fast Automated Securities Transfer ~~(“FAST”~~("FAST") program, then upon request of the Holder and provided that the shares to be issued are eligible for transfer under Rule 144 of the Securities Act of 1933, as amended (the ~~“Securities Act”~~"Securities Act"), or are effectively registered under the Securities Act, the Company will cause its transfer agent to electronically issue the Common Stock issuable upon conversion to the Holder through the DTC Direct Registration System ~~(“DRS”~~("DRS"). If the Company is not participating in the DTC FAST program, then the Company agrees in good faith to apply and cause the approval for participation in the DTC FAST program.

The Conversion Price is subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the ~~Company’s~~Company's securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events. No fractional shares of the Common Stock shall be issuable upon the conversion of shares of the Series B Preferred Stock and the Company shall pay the cash equivalent of any fractional share upon such conversion.

If the Company fails to deliver shares in accordance with the required time frame, then for each conversion, a penalty of $1,500 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made. Such penalty may be converted into Common Stock at the Conversion Price or payable in cash, at the sole option of the Series B Holder (under the ~~Holder’s~~Holder's and the ~~Company’s~~Company's expectations that any penalty amounts shall tack back to the original date of the issuance of Series B Preferred Stock, consistent with applicable securities laws).

In no event will the Series B Holder be entitled to convert any Series B Preferred Stock, such that upon conversion the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Series B Preferred Stock or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to these limitations), and (2) the number of shares of Common Stock issuable upon the conversion of Series B Preferred Stock, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. The limitations on conversion may be waived by the Holder upon, at the election of the Series B Holder, not less than 61 days prior notice to the Company, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Series B Holder, as may be specified in such notice of waiver).

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Except as required by law, the Series B Holders are not entitled to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting). Each Holder of outstanding shares of Series B Preferred Stock will be entitled, on the same basis as holders of Common Stock, to receive notice of such action or meeting.

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So long as any shares of the Series B Preferred Stock remain outstanding, the Company will not, without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock voting together as one class: (a) alter or change the rights, preferences or privileges of the shares of the Series B Preferred Stock so as to affect materially and adversely such shares; or (b) create any new class of shares having preference over the Series B Preferred Stock.

The Series B Holder has the right, at its sole discretion, to elect a fixed conversion price for the Series B Preferred Stock. The Fixed Conversion Price may not be lower than the Conversion Price. The Company will not, by amendment of its Certificate of Incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Series B Certificate, and will at all times carry out all the provisions of the Series B Certificate.

Series C Preferred Stock

In November 2018, the Company filed a Certificate of Designation for its Series C Preferred Stock (the “Series C Certificate”) with the Secretary of State of Nevada designating 36,000 shares of its authorized preferred stock as Series C Preferred Stock. The shares of Series C Preferred Stock have a par value of $0.001 per share. The total face value of this entire series is three million six hundred thousand dollars ($3,600,000). Each share of Series C Preferred Stock has a stated face value of One Hundred Dollars ($100) (“Share Value”) and is convertible into shares of fully paid and non-assessable shares of common stock of the Company.

As discussed in Note 3, the Company issued 36,000 shares of Series C Preferred Stock to the owner of the common stock of EllisLab, Inc. in the Merger, which shares were surrendered and cancelled on September 30, 2019 pursuant to the sale of EllisLab Corp.

The holders of outstanding shares of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive dividends pari passu (on a pro rata basis) with the holders of Series B Preferred Stock and Common Stock, except upon a liquidation, dissolution and winding up of the Company. Such dividends shall be paid equally to all outstanding shares of Series C Preferred Stock, Series B Preferred Stock and ~~Common Stock,~~common stock, on an as-if-converted basis with respect to the Series C Preferred Stock and Series B Preferred Stock.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Holder of each outstanding share of the Series C Preferred Stock shall be entitled to receive, on a pro rata basis with the outstanding Series B Preferred Stock, out of the assets of the Company available for distribution to its shareholders upon such liquidation, whether such assets are capital or surplus of any nature, an amount equal to one hundred dollars ($100.00) for each such share of the Series C Preferred Stock (as adjusted for any combinations. consolidations, stock distributions, stock splits or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment shall be made or any assets distributed to the holders of ~~the Common Stock,~~common stock, and, after such payment, the remaining assets of the Company shall be distributed to the holders of ~~Common Stock.~~common stock.

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Each share of Series C Preferred Stock is convertible into twenty thousand (20,000) shares of the Company’s fully paid and nonassessable shares of ~~Common Stock,~~common stock, as adjusted. The Series C Preferred Stock have the respective rights, privileges and designations as are set forth in the Certificate of Designations, Preferences, Rights and Limitations of Series C Preferred Stock appended hereto as Exhibit 4.1. The Series C Preferred Stock contains a blocker that prevents the Holder from converting the Series C Preferred Stock if such exercise would result in beneficial ownership of more than 4.99% of the outstanding shares of the Company’s stock, without at least 61 days of prior notice. Under the Series C Preferred Stock, the Holder is also subject to the Rule 144 restrictions of an affiliate.

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Except as required by law or as specifically provided in the Certificate of Designation, the Series C Holders shall not be entitled to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting); provided, however, that each Series C Holder shall be entitled, on the same basis as holders of Common Stock, to receive notice of such action or meeting.

~~Common~~Series D Preferred Stock

On ~~April 20, 2016,~~November 27, 2019, the Company ~~amended~~filed a Certificate of Designation for its ~~articles~~Series D Preferred Stock (the “Series D Certificate”) with the Secretary of ~~incorporation to reduce the number~~State of ~~authorized~~Nevada which designates 1,000 shares of ~~common~~the Company’s preferred stock ~~from 1,000,000,000~~par value $0.001 per share as Series D Preferred Stock. William E. Beifuss, Jr., the Company’s President and Chief Executive Officer, was issued 1,000 shares of Series D Preferred Stock valued at $15,000 by an independent valuation firm, which shares were outstanding as of December 31, 2019. The 1,000 shares of Series D preferred stock were automatically redeemed on January 11, 2020, 45 days after the effective date of the Series D Certificate.

Pursuant to ~~100,000,000~~the terms of the Designation, holders of Series D Preferred Stock shall not be entitled to dividends or a liquidation preference and shall have no conversion rights. For so long as any shares of the Series D Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to ~~affect~~vote in an amount equal to fifty-one percent (51%) of the total voting power of the Company’s shareholders. Such vote shall be determined by the holder(s) of a ~~one-for-ten reverse stock split~~majority of ~~its authorized,~~the then issued and outstanding shares of Series D Preferred Stock.

The shares of the Series D Preferred Stock shall be automatically, and without any required action by the Company or the holders thereof, redeemed by the Company at their par value on the first to occur of the following triggering events: (i) a date forty-five (45) days as after the Effective Date, (ii) on the date that Mr. Beifuss. ceases, for any reason, to serve as officer, director or consultant of the Company, it being understood that if Mr. Beifuss continues without interruption to serve thereafter in one or more capacities as officer, director or consultant of the Company this shall not be considered a cessation of service, or (iii) on the date that the Company’s shares of common ~~stock.~~stock first trade on any national securities exchange and such listing is conditioned upon the elimination of the preferential voting rights of the Series D Preferred Stock set forth in the Certificate of Designation.

Common Stock

Effective February 14, 2020, the Company effected a reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225) with the filing of a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada. The Company has given retroactive ~~affect~~effect for the reverse stock split in its financial statements and notes thereto for all periods ~~presented in the accompanying financial statements.~~presented.

On April 29, 2016, our Board of Directors and the holder of a majority of the total issued and outstanding voting stock of the Company authorized and approved an amendment to the Company’s articles of incorporation to increase the number of authorized shares of common stock from 100,000,000 to 2,000,000,000.

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As of ~~September~~June 30, ~~2019,~~2020 and December 31, ~~2018,~~2019, the Company had ~~115,692,996~~51,507,228 and ~~40,750,040~~1,049,380 shares of common stock issued and outstanding, respectively.

During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, the Company issued a total of ~~74,942,956~~50,457,848 shares of common ~~stock at fair value in consideration~~stock: 40,677,465 shares for the conversion of ~~$125,521~~$87,081 of principal of convertible ~~promissory~~ notes payable, accrued interest payable of ~~$9,038~~$8,689, and fees of ~~$250.~~$2,250; 9,777,778 shares for the conversion of 1,100 shares of Series B preferred stock recorded at par value; and 2,605 shares for the rounding of shares in the February 2020 reverse stock split recorded at par value of $3. In connection with the convertible debt and Series B preferred stock conversions, the Company reduced derivative liabilities by ~~$143,692.~~$311,547. There was no gain or loss on settlement of debt due to the conversions occurring within the terms of the ~~convertible note.~~underlying agreements

During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, the Company ~~did not issue any~~issued 145,365 shares of common ~~stock.~~stock at fair value in consideration for the conversion of $72,710 of principal of convertible promissory notes and accrued interest payable of $3,729. In connection with the convertible debt conversions, the Company reduced derivative liabilities by $82,632. There was no gain or loss on settlement of debt due to the conversion occurring within the terms of the convertible note.

7.8. STOCK OPTIONS AND WARRANTS

As of ~~September~~June 30, ~~2019,~~2020, the Board of Directors of the Company had granted non-qualified stock options and warrants exercisable ~~that were outstanding~~ for a total of ~~41,400,000~~184,001 shares of common stock to its employees, officers, and consultants.

As further discussed in Note 3, on November 30, 2018 in connection with the Merger, the Company issued a ten-year option to purchase 100,000,000 shares of common stock of the Company, at an exercise price of $0.005. The option vested upon grant but may not be exercised for 2 years from the date of the Merger. Stock-based compensation of $599,998, measured at the grant date using a multinomial lattice model, was included in the purchase price recorded in the Merger and recorded to additional paid-in capital. This option was surrendered upon the sale of EllisLab Corp. on September 30, 2019.

On November 30, 2018, the Company also issued ten-year warrants to two consultants to purchase a total of 40,000,000 shares of common stock of the Company, at an exercise price of $0.005. The warrants vested upon grant but may not be exercised for 2 years from the date of issuance. Stock-based compensation of $188,127, measured at the grant date using a multinomial lattice model, was included in general and administrative expenses and recorded to derivative liabilities due to the existence of a tainted equity environment.

We recognized no stock-based compensation expense for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~

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2019.

As of ~~September~~June 30, ~~2019,~~2020, we had no unrecognized stock-based compensation expense.

A summary of the Company’s stock options and warrants as of ~~September~~June 30, ~~2019,~~2020, and changes during the ~~nine~~six months then ended is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value		Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value

Outstanding at December 31, 2018		141,406,250		$	0.006		9.84
Outstanding at December 31, 2019											184,001	$	1.544		8.65
Granted		-		$	-						-	$	-
Exercised		-		$	-						-	$	-
Forfeited or expired		(100,006,250	)	$	0.01						-	$	-

Outstanding at September 30, 2019		41,400,000		$	0.007		8.90	$	-
Outstanding at June 30, 2020											184,001	$	1.544		8.15	$	-

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing price of our common stock of ~~$0.0022~~$0.0550 as of ~~September~~June 30, ~~2019,~~2020, which would have been received by the holders of in-the-money options and warrants had the holders exercised their options and warrants as of that date.

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9. DERIVATIVE LIABILITIES

The fair value of the Company’s derivative liabilities is estimated at the issuance date and is revalued at each subsequent reporting date. We estimate the fair value of derivative liabilities associated with our convertible notes payable, Series B preferred stock and warrants using a multinomial lattice model based on projections of various potential future outcomes. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt and equity are included in the value of the derivatives.

The significant assumptions used in the valuation of the derivative liabilities at ~~September~~June 30, ~~2019~~2020 are as follows:

Conversion to stock

Monthly

Stock price on the valuation date

$ 0.0022

Conversion price

$
1.60 - $0.00095

Risk free interest rates

1.49% - 2.74
%
Years to maturity

15.0

Expected volatility

185%–363
%

Conversion to stock

Monthly

29
Stock price on the valuation date
$0.0550
Risk free interest rates
0.13% - 0.66
%
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Years to maturity
15.0
Expected volatility
274% – 831
%

The value of our derivative liabilities was estimated as follows at:

	September 30, 2019		December 31, 2018		June 30, 2020		December 31, 2019

Convertible notes payable	$	4,144,402	$	7,809,054	$	3,286,781	$	3,606,194
Series B preferred stock		2,576,271		2,339,898		3,417,514		2,535,359
Warrants		111,618		214,153		12,407		19,342

Total	$	6,832,291	$	10,363,105	$	6,716,702	$	6,160,895

The calculation input assumptions are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liability will fluctuate from period to period, and the fluctuation may be material.

~~9. OPERATING LEASE~~10. RELATED PARTY TRANSACTIONS

Pursuant to a written consulting agreement, dated May 31, 2013 and amended effective November 1, 2016, William E. Beifuss, Jr., our current President, Chief Executive Officer and Acting Chief Financial Officer, is to receive fees for services of $10,000 per month. Fees payable to Mr. Beifuss of $70,000 and $10,000 are included in accounts payable as of June 30, 2020 and December 31, 2019, respectively.

As discussed in Note 7, the Company issued 36,000 shares of Series C Preferred Stock to Rick Ellis, the former Chief Executive Officer of the Company and Chief Executive Officer of EllisLab Corp., in the EllisLab Corp. Merger, which shares were surrendered and cancelled on September 30, 2019 pursuant to the EllisLab Corp. Sale Agreement.

As discussed in Note 7, in November 2019, the Company issued to Mr. Beifuss 1,000 shares of Series D Preferred Stock for services valued at $15,000 by an independent valuation firm. The shares were automatically redeemed in January 2020, 120 days after the effective date of the related Series D Preferred Stock Certificate.

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As discussed in Note 7, effective February 26, 2020, Mr. Beifuss converted 1,100 shares of Series B preferred stock into 9,777,778 shares of the Company’s common stock. Mr. Beifuss previously acquired the Series B shares from a lender in a private transaction. The transaction was recorded at the par value of the common stock.

See Note 5 for discussion of convertible notes payable with related parties.

11. COMMITMENTS AND CONTINGENCIES

Operating Lease

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter. Management has assumed a three-year life for the sublease arrangement. On January 1, 2019, we adopted ASC 842, “Leases,” which resulted in the recognition of an operating lease liability and corresponding right-of use asset (“ROU”) ~~(included in other assets)~~ in the amount of $18,352.

As of ~~September~~June 30, 2020 and December 31, 2019, the operating lease liability (recorded as a current liability) and ROU asset had a balance of ~~$10,469. The current portion of the operating lease liability as of September 30, 2019 was $10,469.~~$1,975 and $7,708, respectively.

For the ~~nine~~three months ended ~~September~~June 30, 2020 and 2019, the Company recognized operating lease cost of ~~$9,000,~~$3,000. For the six months ended June 30, 2020 and 2019, the Company recognized operating lease cost of $6,000.

The table below reconciles the Company’s future cash obligations for the operating lease liability recorded on the consolidated balance sheet as ~~September~~June 30, ~~2019:~~2020:


2019	$	3,000
2020		8,000		$	2,000
Total minimum lease payments		11,000
Less amount representing interest		(531	)		(25	)

Present value of operating lease obligation	$	10,469		$	1,975

~~10. RELATED PARTY TRANSACTIONS~~

Pursuant to a written consulting agreement, dated May 31, 2013 and amended effective November 1, 2016, William E. Beifuss, Jr., our current President, Acting Chief Financial Officer and former Interim Chief Executive Officer , receives annual consulting fees of $120,000, of which $30,000 and $90,000 were paid in each of the three months and nine months ended September 30, 2019 and 2018, respectively.

Effective December 1, 2018, Rick Ellis, Chief Executive Officer of the Company and Chief Executive Officer of EllisLab Corp., received a monthly salary of $10,000, or $30,000 and $90,000 for the three months and nine months ended September 30, 2019, respectively. Effective with the sale of EllisLab Corp. on September 30, 2019, Mr. Ellis resigned as the Company’s Chief Executive Officer and the monthly salary was terminated.

~~See Note 5 for discussion of convertible notes payable with related parties.~~

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~~11.~~12. SUBSEQUENT EVENTS

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following:

~~Subsequent Borrowings~~Convertible Notes

~~We received an advance under~~Effective July 7, 2020, the ~~August 2018 $500,000 CPN of $25,000 on October 8, 2019.~~

~~On October 31, 2019, we~~Company entered into a 12% convertible note with an ~~agreement to issue a 10% convertible promissory note~~institutional investor in the ~~aggregate~~ principal amount of up$33,000. The note matures on July 7, 2021. The Company received net proceeds of $30,000 after payment of $3,000 in legal fees and other fees to ~~$500,000 (the “October 2019 $500,000 CPN”).~~the lender. The lender, ~~may advance~~at its option after 180 days from the ~~Company consideration for~~issuance of the note, ~~in such amounts as~~may convert the ~~lender may choose in its sole discretion. The~~unpaid principal balance of, and accrued interest on, the note ~~is convertible~~ into shares of ~~our~~the Company’s common stock at a 45% discount from the lowest trading price ~~per share equal~~during the 20 trading days prior to conversion. The Company may prepay the ~~lesser of: $0.01; 50%~~note during the 180 days from the issuance of the ~~lowest trade price~~note at a redemption premium of ~~our common stock subsequent to~~150%. After the ~~effective date~~expiration of 180 days after issuance, the ~~note; or~~Company has no right of prepayment.

Effective July 8, 2020, the ~~lowest effective price per share granted to any person or entity (exclusive~~Company entered into a 10% convertible note with an institutional investor in the principal amount of ~~our officers and directors) to acquire common stock subsequent to the effective date of the note.~~$40,000. The note matures ~~with respect~~on July 8, 2021. The Company received net proceeds of $35,000 after an original issue discount of $2,200 and payment of $2,800 in legal fees and other fees to ~~each advance, one year~~the lender. The lender, at its option at any time, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 50% discount from the ~~effective date~~lowest trading price during the 25 trading days prior to conversion. The Company may prepay the note during the 180 days from the issuance of ~~each advance. On October 31, 2019, we received proceeds~~the note at a redemption premium ranging from 125% to 145%. After the expiration of ~~$25,000 pursuant to~~180 days after issuance, the ~~October 2019 $500,000 CPN.~~Company has no right of prepayment.

~~We received an advance under the October 2019 $500,000 CPN of $25,000 on November 12, 2019.~~

Convertible Note Conversions

Subsequent to ~~September~~June 30, ~~2019, two~~2020, three lenders converted a total ~~note~~of $86,065 of principal, $7,785 of ~~$41,287, total~~ accrued interest, ~~payable of $1,750~~ and ~~$750~~$8,500 in fees into ~~64,271,622 common~~54,159,867 shares of the ~~Company.~~Company’s common stock.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below, and elsewhere in this report, are not related to historical results, and are forward-looking statements. Forward-looking statements present our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements frequently are accompanied by such words such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms or other words and terms of similar meaning. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or timeliness of such results. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements contained herein after the date of this report. Subsequent written and oral forward looking statements attributable to us or to persons acting in our behalf are expressly qualified in their entirety by the cautionary statements and risk factors set forth in our annual report on Form 10-K for the year ended December 31, ~~2018~~2019 filed with the SEC on April ~~1, 2019,~~14, 2020, and in other reports filed by us with the ~~SEC~~SEC.

You should read the following description of our financial condition and results of operations in conjunction with the condensed financial statements and accompanying notes included in this report.

Current Overview

On November 30, 2018, the Company entered into an Agreement and Plan of Merger ~~with~~(the “Merger Agreement”) pursuant to which EllisLab, Inc., an S Corporation owned 100% by Rick Ellis, ~~(“Ellis”),~~merged with and into EllisLab Corp., a newly formed ~~Nevada corporation and wholly owned~~ subsidiary of the Company ~~pursuant to which~~(the “Merger”). EllisLab, Inc. ~~merged with~~builds software for web professionals and ~~into EllisLab Corp. (the “Merger”).~~provides related support services. Pursuant to the terms of the Merger Agreement, Ellis received 36,000 shares of the Company’s newly designated Series C Convertible Preferred Stock, with a stated value of $100 per share, in exchange for the cancellation of all common shares of EllisLab, Inc. owned by Ellis, which shares represented 100% of the issued and outstanding capital stock of EllisLab, Inc. The separate legal existence of EllisLab, Inc. ceased, and EllisLab Corp. ~~(“EllisLab”)~~ became the surviving company. EllisLab is the developer of an open-source CMS software, called ExpressionEngine, with an early stage development effort to use AI in the creation of highly personalized digital content and online experiences.

In November 2018, we transformed ExpressionEngine into a free and open source software platform (FOSS), following in the footsteps of RedHat, WordPress and other successful open source platforms. We believed that doing so would allow us to quickly increase the user base of ExpressionEngine. From this community we intended to collaborate, distill, and develop our AI-based content personalization products and services.

In changing to a FOSS model, we no longer derive our revenue from software sales, but rather from complementary services and premium add-ons to the ExpressionEngine platform and community. We are currently executing a plan to achieve profitability with these new products and services.

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On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with Rick Ellis to sell to Rick Ellis all of the issued and outstanding shares of EllisLab Corp. for ~~$10,000. In payment of~~$10,000 and the ~~purchase price, Rick Ellis tendered and assigned to the Company~~ 36,000 shares of the Company’s Series C ~~preferred stock owned~~Convertible Preferred Stock acquired by ~~him,~~Rick Ellis in the Merger, which ~~represents~~represented all of the issued and outstanding shares of the Company’s Series C ~~preferred stock. In connection with~~Convertible Preferred Stock. Pursuant to the ~~EllisLab~~Ellis Lab Corp. Sale Agreement, the ~~Covenant Not to Compete~~Company effectively divested itself of the Ellis Lab business and the Lockup of Stock Consideration entered into in connection with the Merger were terminated and the parties’ obligations thereunder released. The acquisition of EllisLab, Inc. in the Merger has been accounted for as a purchase.discontinued it.

Consequently, the revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of income taxes” in our condensed statements of operations for ~~all period presented. The~~the three months and six months ended June 30, 2019. Where presented, the EllisLab Corp. assets and liabilities have been retroactively reclassified as assets and liabilities of discontinued operations. ~~See Note 3~~

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We are an early stage developer and acquirer of cell tower sites for 5G services. We intend to develop a portfolio of cell tower sites to help meet the ~~condensed financial statements.~~expected demand of rapidly growing 5G networks. To rapidly enter the market, we plan to partner or co-develop a portfolio of cell tower sites to help meet the demands of 5G networks. Our goal is to become a “landlord” of tomorrow’s wireless communications assets.

Results of Operations

Three Months and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 Compared to the Three Months and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019

Revenues

As discussed above, revenues and expenses of EllisLab Corp. are combined and presented as loss from discontinued operations, net of income taxes in our condensed statements of operations. Therefore, we reported no revenues for ~~all periods presented.~~the three months and six months ended June 30, 2020 and 2019. On September 30, 2019, we sold EllisLab Corp. and currently have no other sources of revenues.

General and Administrative Expenses

General and administrative expenses decreased to ~~$91,153~~$79,292 in the three months ended ~~September~~June 30, ~~2019~~2020 from ~~$98,055~~$84,408 in the three months ended ~~September~~June 30, ~~2018~~2019 and decreased to ~~$287,580~~$172,586 in the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 from ~~$475,446~~$196,428 in the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The ~~decrease in general and administrative expenses is~~decreases are due primarily to decreased salaries in the current fiscal year and a decrease in professional fees.

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Depreciation and Amortization Expense

Our investment in property and equipment currently is not material to our operations. Depreciation expense was ~~$(1)~~$270 and ~~$337~~$284 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~was $359~~$324 and ~~$1,011~~$360 for the ~~nine months ended September 30, 2019 and 2018, respectively.~~

~~Bad Debt Expense~~

From December 1, 2018 through September 30, 2019, we provided operating advances to EllisLab Corp. totaling $356,853, which advances were eliminated in our consolidated financial statements. Pursuant to the sale of EllisLab Corp. on September 30, 2019, we agreed to forgive these operating advances and $356,853 was recorded as a bad debt expense in our statements of operations for the three months and six months ended ~~September~~June 30, ~~2019. We had no bad debt expense in the prior year periods presented.~~2020 and 2019, respectively.

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Other Income (Expense)

Total other ~~income~~expense was ~~$54,260~~$892,106 for the three months ended ~~September~~June 30, ~~2019 and~~2020 compared to total other ~~expense was $473,246~~income of $119,076 for the three months ended ~~September~~June 30, ~~2018. Total other income was $3,176,832 and $1,279,576 for the nine months ended September 30, 2019 and 2018, respectively.~~2019. The total other income for ~~those periods~~the first quarter of the last fiscal year resulted from a gain on change in derivative liabilities, partially offset by interest expense.

Total other expense was $1,174,233 for the six months ended June 30, 2020 compared to total other income of $3,122,572 for the six months ended June 30, 2019. The total other income for the first quarter of the last fiscal year resulted from a gain on change in derivative liabilities, partially offset by interest expense.

We reported a loss on change in derivative liabilities of $736,625 in the three months ended June 30, 2020 compared to a gain on change in derivative liabilities of ~~$300,750~~$378,026 in the three months ended ~~September~~June 30, ~~2019 compared to~~2019. We reported a loss on change in derivative liabilities of ~~$235,651~~$826,588 in the ~~three~~six months ended ~~September~~June 30, ~~2018. We reported~~2020 compared to a gain on change in derivative liabilities of ~~$3,904,122 and $2,029,272~~$3,603,372 in the ~~nine~~six months ended ~~September~~June 30, ~~2019 and 2018, respectively. Our convertible debt continued to increase during the current year resulting in additional derivative liabilities.~~2019. We estimate the fair value of the derivatives associated with our convertible notes, certain stock options, and our Series B Preferred Stock using a multinomial lattice model based on projections of various potential future outcomes. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements, and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Our interest expense ~~increased~~decreased to ~~$246,490~~$155,481 for the three months ended ~~September~~June 30, ~~2019~~2020 from ~~$237,595~~$258,950 for the three months ended ~~September~~June 30, ~~2018. Our interest expense~~2019 and decreased to ~~$727,290~~$347,645 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 from ~~$749,696~~$480,800 for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The ~~increase or~~ decrease in interest expense ~~results~~in the current fiscal year resulted primarily from ~~the timing of~~lower amortization of debt discount ~~recorded on our convertible promissory notes. In the current year,~~as we have ~~incurred additional interest expense accrued on~~had limited new ~~convertible notes payable.~~debt.

~~Loss from Discontinued Operations, net of Income Taxes~~

As discussed above, the revenues and expenses for EllisLab Corp. are combined and reported as “loss from discontinued operations, net of income taxes” in our condensed statements of operations for all period presented. Those losses were $64,315 and $269,693 were the three months and nine months ended September 30, 2019, respectively. The prior periods presented were before our merger with EllisLab Corp.

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Net Income ~~(Loss)~~

As a result of the ~~activity reported~~ above, we reported a net ~~losses~~loss of ~~$458,058 and $571,638 in~~$971,668 for the three months ended ~~September~~June 30, ~~2019 and 2018, respectively. Primarily as~~2020 compared to a ~~result~~net loss of ~~gains~~$62,444 for the three months ended June 30, 2019. We reported a net loss of $1,347,143 for the six months ended June 30, 2020 compared to net income of $2,720,407 for the six months ended June 30, 2019. The net income on a year-to-date basis for the prior year resulted primarily from the gain on change in derivative ~~liabilities, we reported net income of $2,262,349 and $803,119 in the nine months ended September 30, 2019 and 2018, respectively.~~liabilities.

Liquidity and Capital Resources

As of ~~September~~June 30, ~~2019,~~2020, we had total current assets of ~~$12,714, including~~$15,108, comprised of cash, ~~of $1,483,~~ and total current liabilities of ~~$9,839,595,~~$10,282,072, resulting in a working capital deficit of ~~$9,826,881.~~$10,266,964. Included in our current liabilities at ~~September~~June 30, ~~,2019~~2020 are derivative liabilities totaling ~~$6,832,291,~~$6,716,702, which we do not anticipate will require cash payments to settle.

We have funded our operations ~~including the operations of EllisLab Corp.,~~ primarily from the proceeds of convertible notes payable. ~~During~~We have been limited in raising funds during the ~~nine~~current fiscal year and received $60,000 of net proceeds from convertible notes payable during the six months ended ~~September~~June 30, ~~2019, we~~2020. We also received proceeds of ~~$517,000. We believe that~~$9,501 from a PPP loan in May 2020. These funds have not been sufficient to meet our ~~funding~~operating needs, including payroll and payments to our key consultants.

During the six months ended June 30, 2020, we used net cash of $62,668 in ~~the short-term will be less~~operating activities as a result of ~~the sale~~our net loss of ~~EllisLab Corp. on September 30, 2019.~~$1,347,143, partially offset by non-cash expenses totaling $1,043,249, decrease in prepaid expenses of $2,808 and increases in accounts payable of $87,985, accrued expenses of $19,125 and accrued interest, notes payable of $131,308.

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During the ~~nine~~six months ended ~~September~~June 30, 2019, we used net cash of ~~$534,749~~$376,469 in operating activities as a result of our net income of ~~$2,262,349,~~$2,720,407, non-cash expenses totaling ~~$902,147, and~~$363,127, increases in accounts payable of ~~$18,585,~~$24,534, accrued expenses of $2,076, accrued interest, ~~note~~notes payable of ~~$182,604,~~$118,034 and ~~net~~ change in net assets of discontinued operations of ~~$9,408,~~$16,378, offset by non-cash gain of ~~$3,904,122 and an increases prepaid expenses of $7,796.~~

During the nine months ended September 30, 2018, we used net cash of $478,063 in operating activities as a result of our net income of $803,119, non-cash expenses totaling $615,155 and increases in accounts payable of $3,990, accrued expenses of $91 and accrued interest, notes payable of $135,552, offset by non-cash gain of $2,029,272$3,603,372 and increase in prepaid expenses of ~~$6,698.~~$17,653.

During the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, we had no net cash provided by or used in investing activities.

Net cash provided by financing activities during the ~~nine~~six months ended ~~September~~June 30, 2020 was $69,501, comprised of proceeds from convertible notes payable of $60,000 and proceeds from PPP loan of $9,501. Net cash provided by financing activities for the six months ended June 30, 2019 ~~and 2018~~ was ~~$517,000 and $480,500, respectively,~~$392,000, comprised of proceeds from convertible notes payable.

~~Although most recently,~~Historically, proceeds received from the issuance of debt have been sufficient to fund our current operating ~~expenses,~~expenses. We estimate that we will need to raise ~~additional funds~~substantial capital or financing over the next twelve months in ~~the future~~order to explore business expansion opportunities and provide the necessary capital to meet our other general and administrative expenses. We anticipate that we will incur operating losses in the next twelve months. Our revenue is not expected to exceed our investment and operating costs in the next twelve months. Therefore, our future operations are dependent on our ability to secure additional financing. Recently, funding opportunities have been limited due to downturns in U.S. equity and debt markets resulting from the world-wide Coved 19 pandemic. Financing transactions, if available, may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and acontinued downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities.

Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences, or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we may have to curtail our marketing and development plans and possibly cease our operations.

Our prospects must be considered considering the risks, expenses, and difficulties frequently encountered by companies in their early stage of operations. To address these risks, we must, among other things, seek growth opportunities through investment and acquisitions, implement and successfully execute our business strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. We cannot assure that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.

Future Impact of Covid-19

The future impact of the Covid-19 pandemic on companies is evolving and we are currently unable to assess with certainty the broad effects of Covid-19 on our business. As of June 30, 2020, the Company had no material assets that would be subject to impairment or change in valuation due to Covid-19. However as of June 30, 2020, the reported values of the Company’s material convertible debt and derivative liabilities are based on multiple factors, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. We believe these inputs will be subject to even more significant changes due to the impact on capital markets of Covid-19, and the future estimated fair value of these liabilities may fluctuate materially from period to period.

Without a current source of revenue, we are currently dependent on debt or equity financing to fund our operations and execute our business plan. We believe that the impact on capital markets of Covid-19 may make it more costly and more difficult for us to access these sources of funding.

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Critical Accounting Policies

Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements. The following is a summary of those accounting policies that involve significant estimates and judgment of management.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment and intangible assets, impairment of assets, the deferred tax valuation allowance, the fair value of stock options and derivative liabilities. Actual results could differ from those estimates.

~~Fair Value of Financial Instruments~~

Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2019, and December 31, 2018, the Company believes the amounts reported for cash, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable and convertible notes payable approximate fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

~~Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;~~

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~~We measure certain financial instruments at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows at September 30, 2019 and December 31, 2018:~~

Total

Level 1

Level 2

Level 3

September 30, 2019:

Derivative liabilities

$ 6,832,291

$ -

$ -

$ 6,832,291

Total liabilities measured at fair value

$ 6,832,291

$ -

$ -

$ 6,832,291

December 31, 2018:

Derivative liabilities

$ 10,363,105

$ -

$ -

$ 10,363,105

Total liabilities measured at fair value

$ 10,363,105

$ -

$ -

$ 10,363,105

Derivative Liabilities

~~Operating Lease~~Fair Value of Financial Instruments

~~On September 5, 2017, we entered into an operating sublease~~Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2020 and December 31, 2019, the Company believes the amounts reported for ~~office space. The base rent for the sublease is $1,000 per month for a period~~cash, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable, notes payable and convertible notes payable approximate fair value because of ~~one year and month-to-month thereafter.~~their short maturities.

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~~On January 1, 2019, we adopted~~

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) ~~ASC 842, “Leases.” ASC 842 requires recognition of~~Accounting Standards Update (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and ~~liabilities for~~ the rights and obligations created by leases and new disclosures about leases. We adopted ASC 842 using the optional modified retrospective transition method. Under this transition method, we did not recast the prior period financial statements presented.lowest priority to unobservable inputs (level 3 measurements). These tiers include:

·	Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

~~The adoption of ASC 842 resulted in the measurement~~

·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows at June 30, 2020 and recognition of an operating lease liability and corresponding right-of use asset (included in other assets) in the amount of $18,352 as of January 1, 2019. The operating lease liability was measured as the present value of assumed remaining lease payments using an estimated incremental borrowing rate. We amortize the right-of-use asset over the term of the lease.December 31, 2019:

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	Total		Level 1		Level 2		Level 3
June 30, 2020:
Derivative liabilities	$	6,716,702	$	-	$	-	$	6,716,702

Total liabilities measured at fair value	$	6,716,702	$	-	$	-	$	6,716,702

December 31, 2019:
Derivative liabilities	$	6,160,895	$	-	$	-	$	6,160,895

Total liabilities measured at fair value	$	6,160,895	$	-	$	-	$	6,160,895

Revenue Recognition

On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition” (Topic 605). The Company had no operating revenues prior to the Merger. Effective December 1, 2018, the Company’s revenues, ~~are~~included in loss from discontinued operations, were derived primarily from the sale of monthly and annual tech support subscriptions and partnership fees, and from software applications that customers purchase via the Company’s online store. Sales ~~are~~were processed using a real-time payment processing company. Revenue from product sales is recorded net of processing costs.

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We determine revenue recognition through the following steps:

·
identification of the contract, or contracts, with a customer;

·
· identification of the performance obligations in the contract;

·
· determination of the transaction price;

·
· allocation of the transaction price to the performance obligations in the contract; and

·
recognition of revenue when, or as, we satisfy a performance obligation.

Subsequent to the agreement to sell EllisLab Corp. on September 30, 2019, the Company does not have any sources of revenues.

Stock-Based Compensation

Stock-based compensation is measured at the grant date based on the value of the award granted using either the Black-Scholes option pricing model or a multinomial lattice model based on projections of various potential future outcomes and recognized over the period in which the award vests. For stock awards no longer expected to vest, any previously recognized stock compensation expense is reversed in the period of termination. The stock-based compensation expense is included in general and administrative expenses.

Recently Issued Accounting Pronouncements

Although there are several new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

~~The Securities and Exchange Commission defines the term “disclosure~~Based on an evaluation of our disclosure controls and ~~procedures” to mean a company’s~~procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of March 31, 2020, our Chief Executive Officer and Acting Chief Financial Officer has concluded that our disclosure controls and ~~other~~ procedures ~~of an issuer that are designed to ensure~~were not effective in ensuring that information required to be disclosed by us in the reports that ~~it files~~we file or ~~submits~~submit under the ~~Securities~~ Exchange Act ~~of 1934~~ is recorded, processed, summarized and reported within the time periods specified in the ~~Securities and Exchange~~ Commission’s rules and forms. ~~Disclosure~~Our Chief Executive Officer and Acting Chief Financial Officer also concluded that, as of June 30, 2020, our disclosure controls and procedures ~~include, without limitation, controls and procedures designed to ensure~~were not effective in ensuring that information required to be disclosed by ~~an issuer~~us in the reports that ~~it files~~we file or ~~submits~~submit under the ~~Securities~~ Exchange Act ~~of 1934~~ is accumulated and communicated to ~~the issuer’s~~our management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to theour Chief Executive Officer and Acting Chief Financial Officer, to allow timely decisions regarding required disclosure.

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~~As of the end of the period covered by this report, we carried out an evaluation, under the supervision~~

Management’s Report on Internal Control over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Exchange Act Rule 13a-15. With the participation of our Chief Executive Officer and Acting Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2020 based on the ~~design and operation~~criteria established in Internal Control-Integrated Framework issued by the Committee of ~~our disclosure controls and procedures.~~Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, ~~the Chief Executive Officer and Acting Chief Financial Officer have~~management concluded that ~~the Company’s disclosure controls and procedures are~~our internal control over financial reporting was not effective as of ~~such date. The Chief Executive Officer~~June 30, 2020, based on those criteria. A control system, no matter how well conceived and ~~Acting Chief Financial Officer have determined~~operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company ~~continues to~~ have been detected.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following ~~deficiencies which represent a~~ material ~~weakness:~~weaknesses:

	1.	As of ~~September~~June 30, ~~2019,~~2020, we did not maintain effective controls over the control environment. Specifically, the Board of Directors does not currently have any independent members. Since this entity level control has a pervasive effect across the organization, management has determined that this circumstance constitutes a material weakness.

	2.	As of ~~September~~June 30, ~~2019,~~2020, due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls and engaged an outside financial consultant to lessen the issue of segregation of duties over accounting, financial close procedures and controls over financial statement disclosure. Accordingly, management has determined that this control deficiency constitutes a material weakness.

	3.	As of ~~September~~June 30, ~~2019,~~2020, we did not establish a formal written policy for the approval, identification, and authorization of related party transactions.

Because of these material weaknesses, management has concluded that the ~~Company’s disclosure controls and procedures were~~Company did not ~~effective.~~

~~Changes in Internal Control Over Financial Reporting.~~

~~There have been no changes in the Company’s~~maintain effective internal control over financial reporting ~~during~~as of June 30, 2020, based on the ~~quarter~~criteria established in “Internal Control-Integrated Framework” issued by the COSO.

Changes in Internal Controls

During the three months ended ~~September~~June 30, ~~2019,~~2020, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or ~~are~~is reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

ITEM 1A. RISK FACTORS

~~There~~The future impact of the Covid-19 pandemic on companies is evolving and we are currently unable to assess with certainty the broad effects of Covid-19 on our business.

The future impact of the Covid-19 pandemic on companies is evolving and we are currently unable to assess with certainty the broad effects of Covid-19 on our business. As of June 30, 2020, the Company had no material assets that would be subject to impairment or change in valuation due to Covid-19. However, as of June 30, 2020, the reported values of the Company’s material convertible debt and derivative liabilities are based on multiple factors, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. We believe these inputs will be subject to even more significant changes due to the impact on capital markets of Covid-19, and the future estimated fair value of these liabilities may fluctuate materially from period to period.

Without a current source of revenue, we are currently dependent on debt or equity financing to fund our operations and execute our business plan. We believe that the ~~risk factors previously disclosed in our annual report~~impact on ~~Form 10-K filed on April 1, 2019.~~capital markets of Covid-19 may make it more costly and more difficult for us to access these sources of funding.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended ~~September~~June 30, ~~2019,~~2020, the Company issued ~~to three lenders~~ a total of ~~42,236,136~~40,677,465 shares of common stock ~~at fair value in consideration~~ for the conversion of ~~$52,811~~$78,481 of principal of convertible ~~promissory~~ notes payable, accrued interest payable of ~~$5,309~~$7,100, and fees of ~~$250.~~

~~The Company relied on an exemption from the registration requirements under Rule 506 of Regulation D and/or Section 4(a)(2) of the Securities Act of 1933, as amended, in~~$2,250. In connection with the ~~foregoing issuances.~~convertible debt stock conversions, the Company reduced derivative liabilities by $48,416.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

~~10.1~~2.1		Agreement ~~for the Purchase~~ and ~~Sale~~Plan of ~~Capital Stock~~Merger, dated as of ~~EllisLab Corp.~~November 30, 2018, by and among Digital Locations, Inc., EllisLab, Inc., Rick Ellis and ~~Rick Ellis~~EllisLab Corp. (Incorporated by reference to the Company’s ~~current report~~Current Report on Form 8-K filed ~~with the Securities and Exchange Commission~~ on ~~October 2, 2019)~~December 3, 2018

31.1*3.1			~~Certification~~Articles of Incorporation of Carbon Sciences, Inc. filed with the ~~principal executive officer pursuant~~Nevada Secretary of State on August 25, 2007 (Incorporated by reference to ~~Rule 13a-14(a) or Rule 15(d)-14(a)~~the Company’s Registration Statement on Form SB-2 filed on July 27, 2007).

31.2*3.2	Articles of Amendment of Articles of Incorporation of Carbon Sciences, Inc. filed with the Nevada Secretary of State on April 9, 2007 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed on July 27, 2007).

3.3	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on May 9, 2011 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on May 16, 2011).

3.4	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on August 1, 2011 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 4, 2011).

3.5	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on August 26, 2013 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2017).

3.6	Series A Preferred Stock Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 17, 2016).

3.7	Series B Preferred Stock Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on March 4, 2016).

3.8	Certificate of Correction, filed with the Nevada Secretary of State on April 1, 2016 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on May 16, 2016)

3.9	Certificate of Change, filed with the Nevada Secretary of State on April 14, 2016 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on May 16, 2016).

3.10	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on June 15, 2016 (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 21, 2017)

3.11	Withdrawal of Series A Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 7, 2017).

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3.12	Series A Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 7, 2017).

3.13	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on November 16, 2017 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 24, 2017)

3.14	Bylaws of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed on July 27, 2007).

3.15	Certificate of Designation of Series C Convertible Preferred Stock of Digital Locations, Inc. filed with the Nevada Secretary of State on November 30, 2 018 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 3, 2018)

3.16	Certificate of Designation of Series D Convertible Preferred Stock of Digital Locations, Inc. filed with the Nevada Secretary of State on November 27, 2019 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 3, 2019)

3.17	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on February 13, 2020 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 20, 2020).

4.1	Form of Warrant issued in connection with Stock Purchase Agreement entered into between the Company and the Purchasers, signatory thereto. (Incorporated by reference to the Company’s Registration Statement on S-1 filed on November 7, 2011)

10.1	Carbon Sciences, Inc. 2011 Equity Incentive Plan. (Incorporated by reference to the Company’s Registration Statement on S-1 filed on November 7, 2011)

10.2	Consulting Agreement between Carbon Sciences, Inc. and William E. Beifuss, Jr., dated May 31, 2013. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 31, 2014)

10.3	Stock Option Agreement between Carbon Sciences, Inc. and Byron Elton, dated September 23, 2013. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2017)

10.4	Stock Option Agreement between Carbon Sciences, Inc. and William Beifuss, Jr., dated September 23, 2013. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2017)

10.5	Form of Promissory Note. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 19, 2017)

10.6	Nonstatutory Stock Option Agreement, dated as of November 30, 2018, between Digital Locations, Inc. and Derek Jones (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 3, 2018)

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10.7	Convertible Promissory Note, dated May 24, 2019, between Digital Locations, Inc. and Power Up Lending Group Ltd. (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

10.8	Convertible Promissory Note, dated June 27, 2019, between Digital Locations, Inc. and Power Up Lending Group Ltd. (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

10.9	Convertible Promissory Note, dated August 13, 2019, between Digital Locations, Inc. and Power Up Lending Group Ltd. (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

10.10	Convertible Promissory Note, dated January 25, 2019, between Digital Locations, Inc. and Crown Bridge Partners, LLC (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

10.11	Convertible Promissory Note, dated May 23, 2019, between Digital Locations, Inc. and Crown Bridge Partners, LLC (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

10.12	Convertible Promissory Note, dated May 23, 2019, between Digital Locations, Inc. and Crown Bridge Partners, LLC (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

10.13	Convertible Promissory Note, dated August 29, 2019, between Digital Locations, Inc. and Crown Bridge Partners, LLC (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

10.14*	Convertible Promissory Note, dated March 16, 2020

10.15*	Convertible Promissory Note, dated June 22, 2020

31.1*	Certification of the ~~principal financial and accounting officer~~Chief Executive Officer pursuant to Rule 13a-14(a) ~~or Rule 15(d)-14(a)~~under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of the Acting Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Chief Executive Officer furnished pursuant to Section 1350 of Chapter 63 of 18 U.S.C. ~~§1350~~ as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.

32.2*		Certification of the Acting Chief Financial Officer furnished pursuant to Section 1350 of Chapter 63 of 18 U.S.C. ~~§1350~~ as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.

EX-101.INS		XBRL INSTANCE DOCUMENT

EX-101.SCH		XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

EX-101.CAL		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

EX-101.DEF		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

EX-101.LAB		XBRL TAXONOMY EXTENSION LABELS LINKBASE

EX-101.PRE		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

__________

*Filed herewith

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Barbara, State of California, on ~~November 14, 2019.~~August 13, 2020.

	DIGITAL LOCATIONS, INC.

	By:	/s/ William E. Beifuss, Jr.
		Chief Executive Officer (Principal Executive Officer) ~~and~~ Acting Chief Financial Officer (Principal ~~Financial &Accounting~~Financial/Accounting Officer)

PART I: FINANCIAL INFORMATION

ITEM 1		FINANCIAL STATEMENTS (Unaudited)	3
3
	Condensed ~~Consolidated~~ Balance Sheets	3
3
	Condensed ~~Consolidated~~ Statements of Operations	4
4
	Condensed ~~Consolidated~~ Statements of Stockholders’ Deficit	5
5
	Condensed ~~Consolidated~~ Statements of Cash Flows	7
7
	Notes to Condensed ~~Consolidated~~ Financial Statements		8
ITEM 2		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		32	30
ITEM 3		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		38	36
ITEM 4		CONTROLS AND PROCEDURES		39	36

PART II: OTHER INFORMATION			38

ITEM 1		LEGAL PROCEEDINGS		40	38
ITEM 1A		RISK FACTORS		40	38
ITEM 2		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		40	38
ITEM 3		DEFAULTS UPON SENIOR SECURITIES		40	38
ITEM 4		MINE SAFETY DISCLOSURES		40	38
ITEM 5		OTHER INFORMATION		40	38
ITEM 6		EXHIBITS		41	39
SIGNATURES				42

DIGITAL LOCATIONS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets

	September 30, 2019			December 31, 2018
ASSETS	(Unaudited)

Current assets:
Cash	$	1,483		$	19,232
Prepaid expenses		11,231			2,000
Current assets from discontinued operations		-			44,251
Total current assets		12,714			65,483

Property and equipment, net		757			1,117
Operating lease right to use		10,469			-
Non-current assets from discontinued operations		-			126,993

Total assets	$	23,940		$	193,593

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable	$	132,021		$	113,436
Accrued expenses and other current liabilities		4,267			2,191
Accrued interest, notes payable		516,318			342,752
Operating lease liability		10,469			-
Derivative liabilities		6,832,291			10,363,105
Convertible note payable, in default		29,500			29,500
Convertible notes payable – related parties ($25,980 in default)		58,600			58,600
Convertible notes payable, net of discount of $337,520 and $341,206, respectively		2,256,129			1,836,964
Current liabilities from discontinued operations		-			120,535
Total current liabilities		9,839,595			12,867,083

Total liabilities		9,839,595			12,867,083

Stockholders’ deficit:
Preferred stock, $0.001 par value; 20,000,000 shares authorized:
Series B, 16,155 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		16			16
Series C, 36,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		-			36
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 115,692,996 and 40,750,040 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		115,693			40,750
Additional paid-in capital		26,013,554			25,492,975
Accumulated deficit		(35,944,918	)		(38,207,267	)
Total stockholders’ deficit		(9,815,655	)		(12,673,490	)

Total liabilities and stockholders’ deficit	$	23,940		$	193,593

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018

Revenues	$	-		$	-		$	-		$	-

Operating expenses:
General and administrative		91,153			98,055			287,580			475,446
Depreciation		(1	)		337			359			1,011
Bad debt expense		356,851			-			356,851			-

Total operating expenses		448,003			98,392			644,790			476,457

Loss from operations		(448,003	)		(98,392	)		(644,790	)		(476,457	)

Other income (expense):
Interest expense		(246,490	)		(237,595	)		(727,290	)		(749,696	)
Gain (loss) on change in derivative liabilities		300,750			(235,651	)		3,904,122			2,029,272

Total other income (expense)		54,260			(473,246	)		3,176,832			1,279,576

Income (loss) from continuing operations before income taxes		(393,743	)		(571,638	)		2,532,042			803,119
Provision for income taxes		-			-			-			-

Income (loss) from continuing operations, net of income taxes		(393,743	)		(571,638	)		2,532,042			803,119

Loss from discontinued operations, net of income taxes		(64,315	)		-			(269,693	)		-

Net income (loss)	$	(458,058	)	$	(571,638	)	$	2,262,349		$	803,119

Net income (loss) per common share:
Basic	$	(0.01	)	$	(0.01	)	$	0.04		$	0.02
Diluted	$	(0.01	)	$	(0.01	)	$	0.00		$	0.02

Weighted average number of shares outstanding:
Basic		90,951,343			38,776,436			61,204,791			38,776,436
Diluted		90,951,343			38,776,436			3,700,131,456			38,776,436

	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock						Common Stock				Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Shares		Amount		Capital		Deficit			Total

Balance, December 31, 2018		-	$	-		16,155	$	16		36,000		$	36			40,750,040	$	40,750	$	25,492,975	$	(38,207,267	)	$	(12,673,490	)

Issuance of common stock for conversion of notes payable and accrued interest payable		-		-		-		-		-			-			74,942,956		74,943		203,558		-			278,501
Return and cancellation of Series C preferred stock		-		-		-		-		(36,000	)		(36	)		-		-		36		-			-
Close out EllisLab Corp. equity accounts		-		-		-		-		-			-			-		-		316,985		-			316,985
Net income		-		-		-		-		-			-			-		-		-		2,262,349			2,262,349

Balance, September 30, 2019		-	$	-		16,155	$	16		-		$	-			115,692,996	$	115,693	$	26,013,554	$	(35,944,918	)	$	(9,815,655	)

DIGITAL LOCATIONS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	Nine Months Ended September 30,
	2019			2018

Cash flows from operating activities:
Net income	$	2,262,349		$	803,119
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		360			1,011
Amortization of debt discount to interest expense		544,686			614,144
Gain on change in derivative liabilities		(3,904,122	)		(2,029,272	)
Bad debt expense		356,851			-
Common stock issued for fees		250			-
Changes in operating assets and liabilities:
Increase in prepaid expenses		(9,231	)		(6,698	)
Increase (decrease) in:
Accounts payable		18,585			3,990
Accrued expenses		2,076			91
Accrued interest, notes payable		182,604			135,552
Net change in assets of discontinued operations		10,843			-

Net cash used in operating activities:		(534,749	)		(478,063	)

Cash flows from investing activities		-			-

Cash flows from financing activities:
Proceeds from convertible notes payable		517,000			480,500

Net cash provided by financing activities		517,000			480,500

Net increase (decrease) in cash		(17,749	)		2,437
Cash, beginning of period		19,232			23,461

Cash, end of period	$	1,483		$	25,898

Supplemental Disclosure:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	-		$	-

	·	identification of the contract, or contracts, with a customer;
	·	identification of the performance obligations in the contract;
	·	determination of the transaction price;
	·	allocation of the transaction price to the performance obligations in the contract; and
	·	recognition of revenue when, or as, we satisfy a performance obligation.

Cash	$	35,822
Accounts receivable		22,235
Property and equipment, net		4,271
Accounts payable		(74,680	)
Accrued expenses		(14,176	)
Deferred revenue		(27,037	)
Loans payable		(60,000	)
Net liabilities		(113,565	)
Intangible assets:
Intellectual property		37,000
Customer base		79,000
Tradename/marks		8,000
Non-compete agreements		1,000
Goodwill		4,934,429

Total	$	4,945,864

LIABILITIES

Current liabilities from discontinued operations:
Accounts payable	$	77,876
Accrued expenses		16,941
Deferred revenue		25,178

Total current assets from discontinued operations	$	120,535

Conversion to stock	Monthly
Stock price on the valuation date	$	0.0022
Conversion price	$	1.60 - $0.00095
Risk free interest rates	1.49% - 2.74		%
Years to maturity		15.0
Expected volatility	185%–363		%